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senate Bill S. Joint Res. 15

Should the Trump Admin’s ‘True Lender Rule’ Be Reversed?

Argument in favor

The Trump administration’s “True Lender Rule” lets non-bank, third party lenders use partnerships with banks to avoid state laws capping interest rates they charge to borrowers who are unaware that they’re not dealing directly with the bank. Repealing the rule will protect American consumers from predatory loans made by deceptive “rent-a-bank” schemes.

jimK's Opinion
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05/12/2021
Yes, the trump’s true lender rule is a tool by which banks can avoid consumer protections by the legislation that prevents them from charging usurious interest rates. The craftily named ‘rule’ allows banks to effectively ignore consumer protection laws through limited partnerships with third party entities. This kind of thing happens in most Republican legislation where the title has absolutely nothing to do with the legislation which either allows their benefactors to skirt regulations or to get large government subsidies. … … … I remember the nimrod Republican Senators’s deceptively titled bill that would fund a large green energy grant to allow refiners to capture carbon normally released as CO2 as part refining process and inject it directly into the fuel being produced. Sounds good until you realize the the carbon infused fuel emits as much CO2 when it is burned as the refining process and the un-supercharged fuel would have. The bill would do nothing to support green energy program goals except move potential carbon tax liabilities from the fuel producers to the consumers. Lot’s of weird stuff can be buried in the details.
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burrkitty's Opinion
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05/11/2021
We should not be enabling predatory lending practices. It violates state usury laws. This disproportionately hurts the poorest people trying to claw their way out of poverty.
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Dave's Opinion
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05/11/2021
Predator lending is still predator lending no matter how many levels you bury it or hide it! This is a form of economic slavery!
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Argument opposed

Potential loopholes within the True Lender Rule should be closed, but repealing the regulation will prevent the Office of the Comptroller of the Currency from addressing the issue through a similar, more comprehensive rule. Instead, the Biden administration should go through a new rulemaking process that builds on the framework of the True Lender Rule.

Freethinker's Opinion
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05/11/2021
Looks like many are financially illiterate. Instead of a class on critical race theory a finance class would be more beneficial in our schools. Surprisingly only 17 states require a personal finance class. The traditional lenders would deny those with bad credit and this will make it more difficult to get a mortgage. Minorities are denied at a higher rate and not because of their race but overall have lower incomes and credit scores. If the dems really cared they would leave this alone but of course they spin it and keep treating minorities like children and acting like they are protecting them from these “predatory loans” but in actuality just decreased their financial options and another way to keep them enslaved to the Democratic Party. It’s the same mistake dems make in all of their policies. Vote Red 2022!
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B.R.'s Opinion
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05/11/2021
The approach should not be to eliminate the True Lender Rule, but rather reform it in a fashion that fixes the issue. This then keeps this option open for those who normally do not qualify for the standard lending path. And while individual states are getting involved with capping the interest rates charged, this should be looked at from both perspectives, i.e., standard and non-standard loans, understanding the risk factor for each. If Congress really wanted to do good by the people, they would consider capping the interest rates on consumer loans and credit cards. Considering that people are over extended, this would be a great help, even if only on a temporary basis.
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Brian's Opinion
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05/11/2021
Sounds like the Trump regulation gave clarity on how to deal with the partnership deals, it’s best to amend it to put a cap on interest on those deals rather than just scrapping it out and reducing liquidity in the credit industry aka less people able to get a loan when needed Side note though is paying over 30% and above in interest is pretty crazy, I’m not sure why they are needing such a bad loan but that can’t be sustainable, I’m wondering if we need better education when it comes to lending and finance at the consumer level
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    Yes, the trump’s true lender rule is a tool by which banks can avoid consumer protections by the legislation that prevents them from charging usurious interest rates. The craftily named ‘rule’ allows banks to effectively ignore consumer protection laws through limited partnerships with third party entities. This kind of thing happens in most Republican legislation where the title has absolutely nothing to do with the legislation which either allows their benefactors to skirt regulations or to get large government subsidies. … … … I remember the nimrod Republican Senators’s deceptively titled bill that would fund a large green energy grant to allow refiners to capture carbon normally released as CO2 as part refining process and inject it directly into the fuel being produced. Sounds good until you realize the the carbon infused fuel emits as much CO2 when it is burned as the refining process and the un-supercharged fuel would have. The bill would do nothing to support green energy program goals except move potential carbon tax liabilities from the fuel producers to the consumers. Lot’s of weird stuff can be buried in the details.
    Like (74)
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    Looks like many are financially illiterate. Instead of a class on critical race theory a finance class would be more beneficial in our schools. Surprisingly only 17 states require a personal finance class. The traditional lenders would deny those with bad credit and this will make it more difficult to get a mortgage. Minorities are denied at a higher rate and not because of their race but overall have lower incomes and credit scores. If the dems really cared they would leave this alone but of course they spin it and keep treating minorities like children and acting like they are protecting them from these “predatory loans” but in actuality just decreased their financial options and another way to keep them enslaved to the Democratic Party. It’s the same mistake dems make in all of their policies. Vote Red 2022!
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    We should not be enabling predatory lending practices. It violates state usury laws. This disproportionately hurts the poorest people trying to claw their way out of poverty.
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    Reverse everything trump.
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    According to the National Consumer Law Center, 138 professors of banking law and consumer finance regulation, from 43 states & DC sent a letter to Congress to reverse the Office of the Comptroller of the Currency’s (OCC’s) final rule on National Banks and Federal Savings Associations as Lenders, known as the “true lender” rule because it violates state laws of 45 states that set a cap on interest rates for lenders, and evades case law in regulating usury. Anyone supporting the True Lender Rule is really supporting high interest rates & usury! https://www.nclc.org/media-center/nearly-140-scholars-call-for-congressional-repeal-of-true-lender-rule.html
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    The fact that half the comments here say “if it’s Trump’s policy, reverse it” shows your true colors as a liberal. You do absolutely no research before you formulate an opinion, and have opinions on political candidates without even knowing the individual policies they introduce. Trump could swat a fly and you’d pounce on him just because it’s Trump. I bet you can’t even name a single law he signed. Try doing some research before formulating your opinions. Frankly you’re embarrassing yourself and the rest of your political party. Goes for both sides, but frankly I see many more liberals do it. I am a man of my word. I think Trump was wonderful, however I am not formulating an opinion on this topic because I am not knowledgeable enough on the circumstances.
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    The approach should not be to eliminate the True Lender Rule, but rather reform it in a fashion that fixes the issue. This then keeps this option open for those who normally do not qualify for the standard lending path. And while individual states are getting involved with capping the interest rates charged, this should be looked at from both perspectives, i.e., standard and non-standard loans, understanding the risk factor for each. If Congress really wanted to do good by the people, they would consider capping the interest rates on consumer loans and credit cards. Considering that people are over extended, this would be a great help, even if only on a temporary basis.
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    Predator lending is still predator lending no matter how many levels you bury it or hide it! This is a form of economic slavery!
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    Anything Donald Trump touched should be reversed. That in itself should not be much of a problem as there isn’t much of anything he did except for kill over 500,000 Americans which sadly can’t be reversed. Hats off to Liz Cheney and she’s damn right, this will be a record of Republicans that are sucking up to trump and his crazy lies and Republicans that are looking for a better party. The Republican party as it stands today is a joke, just like trump a joke.
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    Sounds like the Trump regulation gave clarity on how to deal with the partnership deals, it’s best to amend it to put a cap on interest on those deals rather than just scrapping it out and reducing liquidity in the credit industry aka less people able to get a loan when needed Side note though is paying over 30% and above in interest is pretty crazy, I’m not sure why they are needing such a bad loan but that can’t be sustainable, I’m wondering if we need better education when it comes to lending and finance at the consumer level
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    Don’t know what it is but if it’s a trump thing it should be reversed
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    Reverse trump. Never want to see him ever again.
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    The deception behind the True Lender Rule is unconscionable. Reversing the rule and replacing it with something more transparent is a much better option. See Leslie’s post. She has a solid, documented explanation of why this rule needs to be reversed.
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    Senators: Thank you for voting to repeal the "True Lender Rule." Representatives & Senators, Reverse the "True Lender Rule" to protect American consumers from predatory loans made by deceptive “rent-a-bank” schemes. See the law suit filed by seven states (New York, California, Colorado, Massachusetts, New Jersey, Minnesota, and North Carolina) and the District of Columbia in the Southern District of New York against the Office of the Comptroller of the Currency (“OCC”) and Brian P. Brooks, the Acting Comptroller of the Currency. Details below. Salient Points: 1. The Trump administration’s “True Lender Rule” lets non-bank, third party lenders use partnerships with banks to avoid state laws capping interest rates they charge. 2. The borrowers are likely unaware that they’re not dealing directly with the bank. 3. The True Lender Rule is an “arbitrary” and “capricious” rule that exceeds the OCC’s “statutory jurisdiction” and was promulgated in violation of procedures required by law. For more specifics see https://www.jdsupra.com/legalnews/states-seek-to-invalidate-the-occ-true-6116651/ ### The S.D.N.Y. Complaint ### On January 5, 2021, plaintiffs filed a civil action <https://www.nj.gov/oag/newsreleases21/01.05.21-Complaint.pdf> seeking to invalidate the OCC True Lender Rule on several grounds. First, the complaint alleges that the Rule is beyond the scope of the OCC’s authority.  The OCC is authorized to promulgate rules to clarify an ambiguity or gap in the laws it enforces. The agency said that in issuing the True Lender Rule it was clarifying three lending statutes: the National Bank Act, 12 U.S.C. § 24; the Federal Reserve Act, 12 U.S.C. § 371; and the Home Owners’ Loan Act, 12 U.S.C. § 1463. The complaint contends that those statutes do not address true lender issues, and thus contain no relevant ambiguity and do not authorize the True Lender Rule. Second, the complaint alleges that, even if those statutes could be read to address true lender issues, the True Lender Rule would be a substantively unreasonable interpretation.  Plaintiffs characterize the OCC’s bright-line standard as deviating from “centuries” of usury law, and as turning a blind eye to the economic realities of the transactions.  They further assert that the Rule opens the door for unregulated and predatory lending under the auspices of federal law. Third, the complaint charges that the OCC failed to comply with the Dodd-Frank Act’s procedural and substantive requirements for preempting state usury laws. Among other things, plaintiffs allege that the agency failed to consult with the Consumer Financial Protection Bureau, analyze preemption on a case-by-case basis, or ground its decision in “substantial evidence.” Fourth, even though in adopting the Rule the OCC made clear it remained firmly opposed to rent-a-charter schemes, and that it would be better able to prevent them under the new Rule, the complaint contends that the OCC should be deemed to have reversed its longstanding policy of opposing “rent-a-bank schemes” without a reasoned explanation. On those asserted grounds, the complaint claims that the True Lender Rule is an “arbitrary” and “capricious” rule that exceeds the OCC’s “statutory jurisdiction” and was promulgated “without observance of procedure required by law,” in violation of the Administrative Procedures Act.
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    Predatory lenders surreptitiously using out of state third party lenders to bypass state laws capping interests rates in order to price gouge consumers. Lying? Check. Cheating? Check. Stealing? Check. Yep! That has all the hallmarks of a Trump/Republican rule. It should definitely be reversed immediately.
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    Predatory lending is predatory lending.
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    Anything that is deceptive or hidden to the consumer trying to secure a home loan should not be in place. Any deceptive loopholes should definitely be closed. What President Trump put in place should not be repealed or dismantled—to do so would put the public at a disadvantage when it comes to securing a loan. America first not government!!
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    REINSTATE ANTI-USURY LAWS!
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    Capping interest rates is price control just like rent control, minimum wages, "gouging" laws, ticket scalper laws, etc. It distorts the market and causes reduced supply. In this case instead of people who have bad credit and few options getting a loan legally, they will be forced into the black market and loan sharks or worse. This is an example of the typical government stupidity because they don't understand economics.
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    I have to say yes on this just because having any of the words bank, lender and Trump together in the same sentence makes no sense.
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