Bloomberg, February 4, 2022, Regulators Should Block Costly Fintech Loans, Advocates Say
The Federal Deposit Insurance Corp. and other U.S. agencies need to stop banks they oversee from “engaging in high-cost predatory lending” through their work with financial-technology firms, the National Community Reinvestment Coalition, Consumer Reports, the NAACP, the Center for Responsible Lending and other groups said in a letter Friday.
“Rent-a-bank schemes have flourished at FDIC banks in the past few years and it is time for that to come to an end,” the coalition said in the letter to the heads of the FDIC, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. “The FDIC has the tools that it needs to prevent its banks from fronting for predatory lenders that are evading state law and making grossly high-cost installment loans and lines of credit” with annual percentage rates as high as 225%.
