Since the American Revolution, states have limited interest rates to stop predatory lending. But predatory lenders are starting to launder their loans through banks to evade state laws that make loans up to 179% APR illegal (Bank loans are generally exempt from state rate caps). A rule by the regulator of the nation’s largest banks (the Office of the Comptroller of the Currency or OCC) effective last December would protect these predatory lending “rent-a-bank” schemes and overturn centuries of case law allowing courts to look beyond ruses to the truth. Congress is called to overturn the OCC fake lender rule to prevent state usury laws in at least 45 states from becoming a “dead letter.”
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