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NCRC applauds Congress, President for nullifying the True Lender rule

Today, President Biden signed into law the Congressional Review Act resolution to overturn the harmful True Lender rule.

The True Lender rule, originally finalized in October 2020 by the Office of the Comptroller of the Currency (OCC), permitted national banks to use their charters to facilitate high-cost loans through rent-a-bank relationships with predatory lenders. On May 11, a bi-partisan 52-47 vote in the Senate passed S.J. Resolution 15. On June 23, the U.S. House of Representatives voted 218-208 in favor of H.J. Resolution 35, a resolution concurrent to the Senate’s, to nullify the harmful Trump-era True Lender rule. A broad-based coalition of faith-based groups, veterans organizations, consumer advocates and civil rights groups, and state Attorneys General opposed the True Lender rule.

In May, NCRC members met with 48 Representatives from 26 states and 70 Senators from 35 states to express their support for the resolution as part of NCRC’s annual Just Economy Conference.

Jesse Van Tol, CEO of the National Community Reinvestment Coalition (NCRC), made the following statement:

“We express our deep appreciation to President Biden for his action today to sign the resolution. The Biden Administration completed an important step to undo a rule that would have exposed vulnerable consumers to dangerous loans. We applaud the enactment of this resolution because it defends consumers and takes back the rights of states to enforce their laws against predatory lending. The only purpose behind this rule was to favor predatory lenders at the expense of vulnerable people.

“A sensible approach would have been to see these partnerships for what they are: evasionary structures that trap consumers in harmful debt. But the former leadership at the OCC didn’t take that approach. Thankfully, our champions in Congress did, and with President Biden’s signature today, we are one step closer to a just economy. 

“When the OCC finalized the rule in October 2020, it created a blueprint for partnerships between national banks and high-cost lenders. The rule considered a bank to be the lender even though the non-bank lender played the predominant role in the transaction. In these arrangements, the non-bank lender managed the marketing, closed the loan, collected the payments and purchased all or most of the loan back from the bank in as little as three days. 

“We would like to thank the leadership of Senator Chris Van Hollen (D-MD) and Chair Sherrod Brown (D-OH), who championed the resolution in the Senate and Rep. Chuy Garcia (D-IL) and Chairwoman Maxine Waters (D-CA), who championed the resolution in the House.”

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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