Iowa Attorney General Tom Miller and the Iowa Division of Banking have detailed an Assurance of Discontinuance agreement with Ogden, Utah-based Transportation Alliance Bank.
The agreement stems from Miller alleging Transportation Alliance Bank failed to comply with the Iowa Consumer Credit Code by offering consumer installment loans exceeding the maximum finance charge of 21 percent APR.
From March 1, 2020, to April 8, 2022, Transportation Alliance Bank, through the service provider EasyPay, made approximately 1,611 consumer installment loans to Iowans, primarily through auto repair shops and pet stores, the Iowa Attorney General’s Office said.
According to Miller, Transportation Alliance Bank has voluntarily ceased making loans in Iowa as of April 8, 2022, and did not admit to any wrongdoing or violations of the law under the Assurance.
“There’s a reason Iowa law caps interest rates at 21 percent, to protect consumers,” Miller said. “These types of high-interest loans careen consumers into debt they can never repay. These types of loans are unconscionable. My office has worked to prevent these types of lending situations. So-called ‘rent-a-bank’ schemes attempt to circumvent our laws and put consumers deeper in debt.”
If Transportation Alliance Bank plans to resume lending in Iowa, it must inform the state and the Iowa Department of Banking not less than 30 days in advance with written notice. The restitution plan applies to Iowa residents who received consumer installment loans from the bank with the assistance of EasyPay between March 1, 2020, and April 8, 2022.
According to the agreement, the bank has 90 days to provide restitution directly to consumers.