Unfortuitously, your proposed guideline is really a sort of loan laundering that could allow non-bank lenders to circumvent our state guidelines making customer loans that exceed our state’s limitations.
Here’s exactly just how this proposition undermines Colorado legislation. A non-bank lender, which will ordinarily have to comply with Colorado’s limitations then send the applications to a national bank if they were making the loan, would be allowed to identify Colorado customers and get loan applications filled out and. That bank would then be permitted to deliver the buyer the amount of money for the loan but quickly offer the mortgage back into the non-bank lender for a cost additionally the non-bank lender would then administer the mortgage and gather the charges and interest. The non-bank lender would not have to follow our state rate cap rules and could charge APR’s of 100% or more by“renting the bank” in this way.
This is certainly a “rent-a-bank” proposal – the non-bank loan provider is basically having to pay the bank that is out-of-state hire its charter. The lending company makes use of this arrangement to purchase the capacity to disregard the interest caps associated with the continuing states like Colorado by which they wish to run.
We’d oppose this proposal during good times that are economic. However it is an idea that is particularly bad the COVID pandemic when many of our next-door neighbors and family members are struggling economically. Now, high-cost lending that is predatory more threatening than ever before. Individuals need solid, accountable resources that can help buy them through.
This guideline will never offer good credit choices to underserved communities. It will start the entranceway to high-cost debt traps that drain wide range as opposed to build it – the actual form of predatory services and products Coloradans rejected once they authorized our 36% payday APR caps by a wide margin.
We agree with you that action is required during these severely difficult instances when a lot of Coloradans have been in risk of going hungry, losing their houses, and closing their businesses that are small. We ask one to focus your attention on proven empowerment that is financial like expanded usage of safe and affordable banking, increased use of safe, affordable credit based on the borrower’s ability to settle, free specific monetary coaching, community wealth-building techniques, and strong consumer protections.
The OCC should build upon the customer protections that states like Colorado have put in place perhaps perhaps not widen loopholes that bring right back predatory financial products our state has roundly rejected.
Please table intends to gut the so-called “true lender” doctrine, that is a longstanding anti-evasion provision critical to enforcing state interest rate limitations against high-cost predatory lenders.
Colorado Companies and Organizations
Danny Katz, Colorado Public Interest Analysis Group (CoPIRG)
Scott Wasserman, The Bell Policy Center
Leanne D Wheeler, Veterans of Foreign Wars Post 1
Rosemary Lytle, NAACP Colorado Montana Wyoming State Region Conference
Carmen Medrano, United for an innovative new Economy
Simone Renee, Royal Executive Partnerships
Barbara Freeman, MANAUS – LaMedichi
Josh Downey, Denver Area Work Federation, AFL-CIO
Morgan Royal, Brand New Era Colorado
Lizeth Chacon, Colorado Individuals Alliance (COPA)
Maria Gonzalez, Adelante Community Development
T. A. Taylor-Hunt, Nationwide Association of Consumer Advocates Colorado
Dennis Dougherty, Colorado AFL-CIO
Karen Moldovan, Good Company Colorado
Mike Kromrey, Together Colorado
Kyra deGruy Kennedy, Young Invincibles
Lauren Martens, SEIU Colorado
Carlos Valverde, Colorado Performing Families Party
Jice Johnson, Ebony Company Initiative, PBC
Julie Reiskin, Colorado Cross-Disability Coalition
Jordan Bailey, Philanthropiece
Tiffani Lennon, Colorado Focus On Law and Policy
Peter Severson, Lutheran Advocacy Ministry-Colorado
Robert Brocker, Colorado Senior Lobby
Jeff Kinsey, The Logos Group
Magenta Freeman, DigiMarkPM
Colorado General Assembly Customers
Steve Fenberg, State Senator and Majority Leader
Dominick Moreno, State Senator
Faith Winter, State Senator
Julie Gonzales, State Senator
Brittany Pettersen, State Senator
Tammy Tale, State Senator
Dominique Jackson, State Representative
Mike Weissman, State Representative
Adrienne Benavidez, State Representative
Janet Buckner, State Representative
Yadira Caraveo, State Representative
Emily Sirota, State Representative
Kerry Tipper, State Representative
Jonathan Singer, State Representative
Chris Kennedy, State Representative
Serena Gonzales-Gutierrez, State Representative
Brianna Titone, State Representative
Daneya Esgar, State Representative
Steven payday loans NM Woodrow, State Representative