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CBA Summary of Rent-A-Bank Hearing
The House Financial Services Committee held a hearing today titled “Rent-A-Bank Schemes and New Debt Traps: Assessing Efforts to Evade State Consumer Protections and Interest Rate Caps.”
Chairwoman Waters (D-CA) opened the hearing by emphasizing the harmful impacts payday lending and rent-a-bank schemes having on consumers, particularly referencing the OCC and FDIC’s proposed rule as providing “legal cover” for these companies. Waters was not present for witness questioning. Ranking Member McHenry (R-NC) used both his opening statements and questions to promote the benefits of bank and non-bank partnerships, specifically in fostering technological innovation that has benefits for both financial institutions and consumers themselves. McHenry condemned the Second Circuit Court’s Madden decision as complicating the regulatory precedent around valid when made doctrine.