February Hearings will Address Rent-a-Banks and Loans Sold Across State Lines

The House Financial Services Committee will have hearings next month to address regulations related to loans being sold across states; the hearing is related to the Madden v. Midland funding decision which ruled that usury laws of where a buyer resides do apply when loans are sold across state lines; in November the OCC and FDIC proposed steps to work around this ruling but consumer advocates have concerns over the ability for unregulated non-banks to avoid protections for borrowers; the two-part hearing is titled, “Rent-A-Bank Schemes and New Debt Traps: Assessing Efforts to Evade State Consumer Protections and Interest Rate Caps.” American Banker

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