On September 3, Prosperity Indiana submitted comments on behalf of our network opposing the federal Office of the Comptroller of the Currency’s proposal “National Banks and Federal Savings Associations as Lenders” or "Rent-a-Bank Rule", and offering recommendations to instead strengthen our communities.
In our letter, Prosperity Indiana made the following arguments opposing the 'Rent-a-Bank Rule':
- This rule would allow predatory lenders to evade state imposed rate caps by laundering loans through banks, enabling them to charge triple-digit interest rates even when states have already capped interest at much lower levels.
- The “Rent-a-Bank” rule would directly harm Hoosiers hardest hit by the COVID-19 pandemic and economic depression, including the 37.9% of Hoosiers without emergency savings.
- During our recently-completed Regional Members, our membership of experienced community economic development professionals consistently emphasized their federal policy priority to take action against unfair lending practices, of which Rent-a-Banks are a prime example, and instead promote a fairer financial market.
As an alternative to this damaging rule, Prosperity Indiana urges the OCC to promote alternatives to predatory lending that help lenders build assets and financial stability to keep wealth growing in our communities, including Community Loan Centers.
Read Prosperity Indiana's Comments on National Banks and Federal Savings Associations as Lenders Docket ID: OCC-2020-0026 RIN 1557-AE97.