They say the new rule violates the National Bank Act and the Dodd-Frank Act, as well as the office’s long-standing policy of strongly condemning bank leasing programs in which a national bank simply acts as an intermediary for illegal loans under the States. usury laws.
“Indeed, without any basis in fact, law or policy, the True Lender Rule overturns previous OCC policy and practice to instead approve bogus agreements between non-bank lenders and domestic banks. by virtue of which the bank has no significant implication in the marketing, origination, or guarantee of the loans, nor the preponderant economic interest in the loans â, indicates the complaint.
“By approving these fictitious deals, the OCC is turning a blind eye to its own historic opposition to bank leasing schemes and the prospect of predatory triple-digit interest rate lending to financially troubled consumers in states that expressly prohibit such agreements. ready, âcontinues the complaint.
Also invoking the Administrative Procedure Act, states declare the rule to be âarbitrary and capriciousâ.
“This rule would be wrong at any time, but the Trump administration’s attempts to free predatory lenders on unsuspecting New Yorkers in the midst of a pandemic are cruel and heartless,” Attorney General James said Tuesday. . “Rather than stem the tide of predatory and predatory lending that trap vulnerable consumers in debt cycles, the Trump administration wants to open the floodgates by sanctioning programs that allow the financial services industry to target New Yorkers and paint them a bubble on their backs. “
New York, for example, has both a civil usury rate, set at 16% interest per annum, and a criminal usury rate, set at 25% interest per annum.
California tightened its payday loan law last year, setting a 36% interest rate cap on payday loans. Illinois passed laws in 2005 and 2010, capping loan interest at $ 15.50 per $ 100 and 36% for some loans.
California, Illinois and New York previously sued the Office of the Currency Comptroller last July to challenge similar regulations.
Bryan Hubbard, spokesperson for the Office of the Comptroller of the Currency, declined to comment on the trial on Tuesday afternoon.