May 11, 2021

Van Hollen, Brown, Schumer Applaud Bipartisan Senate Passage of Congressional Review Act Legislation to Repeal Trump-era “Rent-A-Bank” Rule

Senate Passes Van Hollen-Led Resolution to Strike Down Rule Allowing Predatory Lenders to Circumvent State Borrower Protection Laws, Charge Consumers Outrageous Interest Rates

Today, U.S. Senator Chris Van Hollen (D-Md.), a member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Committee Chairman Sherrod Brown (D-Ohio), and Majority Leader Chuck Schumer (D-N.Y.) applauded the bipartisan Senate passage of a resolution to repeal the Trump Administration’s so-called True Lender Rule through the use of the Congressional Review Act. This regulation, finalized in the last months of the prior Administration, allows predatory lenders to skirt state laws meant to curb interest rates on loans and opens the doors for these lenders to prey on vulnerable consumers.

“This is a big win for the American people. While the Trump Administration aimed to dismantle consumer protections, today’s action to strike down the ‘Rent-A-Bank’ rule will help prevent predatory lenders from ripping off consumers by charging loan-shark rates under deceptive terms. I urge my House colleagues to take up this legislation quickly. After the previous Administration rushed through this rule, I vowed to use every tool at our disposal to reverse it, and I will not stop fighting until we get this over the finish line,” said Senator Van Hollen, who led the resolution.

“For years, under both Democratic and Republican administrations, federal regulators cracked down on abusive ‘rent-a-bank’ schemes in which payday lenders funnel their high-interest, predatory loans through national banks to evade state interest rate caps. The OCC’s rule completely reversed that policy, betraying hard-working American families and attacking states’ ability to protect their citizens from predatory loans. I’m heartened that my Senate colleagues have joined us in overturning this harmful rule and urge the House to follow suit,” said Senator Brown. “Today, we showed the people we serve that we’re on their side.”

“Today the Senate is standing up for working families and small businesses all across the country by repealing the Trump Administration’s so-called ‘True Lender Rule’, a Scrooge-like decision that has had devastating consequences, particularly in the middle of a pandemic and economic crisis,” said Leader Schumer. “By reversing this rule, the Senate is protecting millions of hard-working Americans who have fallen victim to predatory lenders promising quick cash or credit, only to be trapped with crippling interest rates that can erase a person’s life savings or even claim their homes. Today’s vote shows the American people the Democratic led Senate will use every tool at our disposal to protect them.”

The legislation is supported by a wide array of stakeholder and consumer protection groups including: a bipartisan group of 25 State Attorneys Generals, the Conference of State Bank Supervisors, the Faith for Just Lending Coalition, Center for Responsible Lending, National Consumer Law Center (on behalf of its low-income clients), Consumer Federation of America, the Military Officers Association of America, the Leadership Conference on Civil and Human Rights, the National Association of Consumer Advocates, the National Association of Federally-Insured Credit Unions, Appleseed Foundation, Consumer Action, National Community Reinvestment Coalition, UnidosUS, U.S. PIRG, and the Woodstock Institute. 

The legislation is led by Congressman Jesús “Chuy” García in the House and was cosponsored in the Senate by Senator Jack Reed (D-RI), Senator Elizabeth Warren (D-MA), Senator Catherine Cortez Masto (D-NV), Senator Tina Smith (D-MN), and Senator Dianne Feinstein (D-CA).


Most states and the District of Columbia have rules in place to protect consumers from predatory loan rates but banks chartered under federal law are exempt through the National Bank Act. The Office of the Comptroller of the Currency (OCC) rule allows non-banks lenders to use superficial and deceptive partnerships with these banks to skirt state laws and charge outrageous annual percentage rates that have gone as high as 179%. In these “rent-a-bank” schemes, the bank attaches its name to the transaction while the customer deals entirely with the non-bank lender, who markets, underwrites, arranges, and collects payments on the loan. 

The Congressional Review Act offers a mechanism for Congress to repeal federal agency rules. Agencies submit their rules to Congress, and it can pass a joint resolution of disapproval to overturn the action under an expedited procedure. Today’s resolution would overturn the OCC’s so-called True Lender Rule and ensure that consumers are protected from predatory “rent-a-bank” schemes.