Sen. Sherrod Brown (D-OH) recently expressed criticism over an administrative plan to grant national charters to online lenders.
Brown, ranking member of the Senate Committee on Banking, Housing, and Urban Affairs, said the effort effectively repeals state efforts to regulate or supervise predatory lending.
“As if it weren’t bad enough the Administration wants to give payday lenders a free pass to trap people in debt, now it is actively undermining Ohio’s efforts to protect working people from these predators,” Brown said. “The Administration should be working to raise pay for working Ohioans, not making it easier for payday lenders to saddle them with triple-digit interest rates.”
Brown said his statement is in response to the Treasury Department’s recent fintech report and the Office of the Controller of the Currency’s (OCC) announcement on granting the charters, noting the Treasury report recommends repealing the Consumer Financial Protection Bureau’s (CFPB) federal payday-lending protections.
The national preemption afforded by the OCC charters will effectively repeal state efforts to regulate or supervise predatory lending, per Brown.
Last year, Brown forwarded correspondence to the OCC noting federal regulators helped spur the 2008 financial crisis by overriding state subprime mortgage protections and urged it not to repeat what he categorized as a mistake.
“The Treasury’s suggested repeal of the CFPB rule, combined with the OCC’s action, would give shady lenders free rein,” Brown said.