Senate votes to overturn ‘true lender’ rule

The Senate Tuesday approved a resolution to overturn the Office of the Comptroller of the Currency’s true lender rule using the Congressional Review Act (CRA). The resolution now heads to the House for consideration.

Under the CRA, legislators can vote to overrule new federal regulations with a joint resolution of disapproval within 60 legislative days after regulators have submitted the rule to Congress. The true lender rule took effect in December 2020.

Ahead of the Senate’s vote, NAFCU Vice President of Legislative Affairs Brad Thaler reiterated the association’s concerns with the OCC’s rule, arguing that it promotes predatory lending practices.

The true lender rule allows banks and federal savings and loan companies to provide their charter to online lenders so they can deliver high-cost loans with annual rates over 100 percent, evading state consumer protections and usury caps and promoting predatory payday lending. Several states have filed suit against the OCC to try to overturn the rule.

 

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