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Foley & Foley

Sherry Foley & Tim Foley

Appellate Practice, Estate Planning & Administration, Education and Commercial Litigation

February 2023
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"Fake Lender" Rule Repealed

In July of 2021, President Biden signed a resolution into law that repealed the Office of the Comptroller of the Currency’s “fake lender” rule. This rule, created in 2020, allowed predatory lenders to evade state caps on loan interest rates. This meant that online lenders could put a bank name on their paperwork, run the loan through the bank but then buy it directly back. These predatory lenders would claim they were just “servicers” for the bank loan when they were the actual lenders. By utilizing this loophole, predatory lenders were caught charging triple-digit interest rates!

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How to Spot and Avoid Predatory Lenders


loan application

As the cost of everything keeps going up – rent, medical bills, child care, groceries, and on and on – more Americans are turning to short-term loans to make ends meet. But not all loans are created equal, and there are more than a few bad actors out there peddling loans that may make a precarious financial situation even worse. Keep reading for tips on how to spot – and avoid – predatory loans.

BY THE NUMBERS

$9 Billion

The Coalition for Responsible Lending estimates that U.S. borrowers lose at least $9.1 billion annually to predatory lending practices.

VIDEO BOOKMARK

Payday Lenders Create Debt Traps

NBC reports on the predatory loans by payday lenders, which can hit consumers with 400% interest rates.
 

THE DOCKET

REPORT RIPOFFS

If you are a victim of predatory lending, contact the Consumer Financial Protection Bureau and your state consumer protection organization.
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