FDIC guideline allows payday as well as other predatory lenders to skirt state usury legislation; AG Ellison joins bipartisan coalition urging withdrawal of guideline they say violates legislation, administrative authority
February 6, 2020 (SAINT PAUL) — Minnesota Attorney General Ellison has accompanied a bipartisan coalition of 24 solicitors basic in opposing a proposition by the Federal Deposit Insurance Commission (FDIC) to preempt state usury regulations that regulate payday along with other high-cost financing, thus rendering it easier for predatory lenders to make use of customers. State usury laws and regulations prevent predatory lenders from using customers by recharging high interest levels on loans. The FDIC’s proposed guideline would allow predatory loan providers to circumvent state usury legislation through “rent-a-bank” schemes, by which federally controlled banking institutions work as loan providers in title just, thereby moving along their exemptions from state guidelines to predatory that is non-bank payday lenders.Continue reading