AG James Has Led Two Lawsuits, Multiple Other Efforts Opposing True Lender Rule
Congress Takes Action to Overturn Trump Era Rule
New York – New York Attorney General Letitia James today applauded one of the first actions taken by Congress to undo a harmful Trump era rule. A bipartisan vote conducted, last night, by the U.S. Senate rescinds the Office of the Comptroller of the Currency’s (OCC) true lender rule that has allowed predatory lenders to take advantage of New York’s most vulnerable consumers. Earlier this year, Attorney General James not only led a lawsuit against the OCC to overturn the rule, but also called on congressional leaders to rescind the rule via legislation. The true lender rule undermines New York’s efforts to prevent predatory lenders from charging high interest rates on loans and bypasses state interest rate caps already in place. With last night’s vote, the Senate not only agreed with Attorney General James that the true lender rule should be invalidated, but prevented the OCC from issuing a similar rule in the future.
“Last night’s vote was a victory for all consumers,” said Attorney General James. “This rule does nothing but make a mockery of federal law and prolong the tide of exploitative and predatory loans that trap vulnerable consumers in cycles of debt. The Senate has acted to stop any further harm from being exacted on the American people, and I look forward to similar and swift action being taken by the House and President Biden.”
The Senate overturned the true lender rule under the Congressional Review Act. When Congress rescinds a rule under the act, the rule is declared null and void and the agency is prohibited from issuing a substantially similar rule in the future (absent authorization from Congress).
Attorney General James’ January lawsuit came after she previously led multiple coalitions, in July and August of last year, in filing lawsuits against the OCC and the Federal Deposit Insurance Corporation regarding rules that would allow banks to sell any high interest loan to a nonbank, predatory lender in an effort to evade interest rate protections. Those lawsuits remain pending.