Senate Hearing on 'Rent-a-Bank' Lending Schemes
January 1, 2023
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The Frame
This hearing examines regulatory practices that allow non-bank lenders to charge interest rates exceeding state-mandated limits, directly affecting the cost of credit for consumers in states with interest rate caps.
Potentially affected actors named in the source documents. Mention is not a position.
Non-bank lenders
These entities utilize bank partnerships to issue loans that may otherwise be restricted by state interest rate laws.
Consumers
Consumers are subject to the interest rates and terms of loans issued through these partnerships.
State Attorneys General
State officials are involved in enforcing state-level interest rate caps and challenging federal rules that may preempt those laws.
Last recorded activity January 1, 2023.
Next step not available in the current record.
Summary
Key Facts
- The hearing took place on April 28, 2021, before the Senate Committee on Banking, Housing, and Urban Affairs.
- The subject of the hearing was 'rent-a-bank' schemes, a practice where non-bank lenders partner with banks to evade state laws limiting interest rates.
- The committee heard testimony from five witnesses, including state officials, policy experts, and academics.
- The hearing included discussion of S.J. Res. 15 and H.J. Res. 35, which were supported by various organizations submitting letters for the record.
- The record includes an amicus brief regarding the case of People of the State of California v. The Office of the Comptroller of the Currency and Brian P. Brooks.
- The committee received written testimony and responses to questions from witnesses regarding the regulation of predatory lending.
Frequently Asked Questions
What is a 'rent-a-bank' scheme?
What was the purpose of this hearing?
Why It Matters
This hearing examines regulatory practices that allow non-bank lenders to charge interest rates exceeding state-mandated limits, directly affecting the cost of credit for consumers in states with interest rate caps.
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Discoveries
Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.
Federal vs. State Authority
The hearing highlights a persistent conflict between federal regulatory actions (OCC) and state-level consumer protection laws regarding interest rate caps.
Connected Entities
Sources
www.govinfo.gov
Analysis Score
0–100- Significance75How much this matters to a regular citizen
- Controversy60Intensity of disagreement among stakeholders
- Entertainment20Compellingness for a non-policy-wonk reader
- Buzz30Current news / social attention level
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