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Analysis

February 4, 2020

Fact Sheet: Bank Regulators Are Paving the Way for Loan Sharks, Payday Lenders, and Debt Collectors to Gouge Consumers with Sky-High Interest Rates

BRIEF DESCRIPTION: Most states have usury laws protecting their residents from predatory lenders who would gouge consumers with outrageous interest rates and fees.  But non-banks have identified a loophole that gets around these laws.  In 2015, Madden v. Midland Funding, LLC addressed the situation in the Second Circuit, but now the OCC and FDIC have proposed rules that would nullify the court’s decision.

 

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