The United States Senate voted in favor of repealing the OCC’s “True Lender Rule” through the Congressional Review Act process in a 52-47 vote. The rule was opposed by CUNA and the League because it did not treat similar products across industry by allowing online payday lending fintech’s to partner with national banks to circumvent state laws that imposed interest rate caps on payday loans. Nebraska voters (83%) overwhelmingly voted in favor of a 36% cap on payday lending loans through a ballot initiative in the November election. Credit unions have a cap on their payday loan alternatives known as PAL loans through the NCUA of 28%. Opponents of the rule argued that it allowed for the return of “Rent-a-Charter”. The rule was utilized by fintechs who would partner with a national bank and so long as the national bank was on the loan documents at the time of origination, the payday lender could charge a higher interest rate than provided for in states like Nebraska. Nebraska’s Senators Ben Sasse and Deb Fischer voted against the rule’s repeal. Nebraska’s Attorney General joined twenty four other state Attorneys General in a letter opposing the True Lender Rule.
