Congress voted Thursday to overturn a Trump administration rule that allowed high-interest consumer lenders to tie up to banks and bypass state-level interest rate caps.
The Office of the Comptroller of the Currency decision in late October stated that any bank or federal savings association that signs loan documents should be considered the âreal lender,â even if the loan is managed or sold to a bank. high interest entity such as as a payday lender. Before this rule, the courts had sometimes ruled these arrangements illegal. Under then-President Donald Trump, the OCC had cited different approaches from the courts to justify drafting the rule.
Because the rule was finalized so close to the end of Mr. Trump’s term, Congress was able to revoke it by a simple majority vote in every Democratic-led chamber under the Congressional Review Act. The Senate approved the repeal of the true lender rule last month by a 52-47 vote; the House followed Thursday with a vote 218-208.
The Biden administration has said it supports the repeal; it takes effect upon signature by the president.
“As we expect President Biden to sign the resolution, I want to reaffirm the agency’s long-standing position that predatory lending has no place in the federal banking system,” the Acting Comptroller said. of the Michael Hsu coin in a press release.