Home   >     Industry    >     Main body
    Previous Post: Next:

    States sue the OCC and Brian Brooks for overriding their controls on predatory lending

    Abstract:More challenges to the OCC's authority come from state regulators into a Manhattan court.

      Kollen Post

      12 minutes ago

      States sue the OCC and Brian Brooks for overriding their controls on predatory lending

      More state regulators are gunning for the OCC and Brian Brooks, this time over usury laws and predatory lending.

      1043 Total views

      6 Total shares

      Listen to article



      Eight states and the District of Columbia are suing the national bank regulator over a rule change that just came into effect.

      Per a Jan. 5 filing, New York's attorney general is leading the charge against the Office of the Comptroller of the Currency and current Acting Comptroller Brian Brooks.

      Back in October, the OCC laid out its “True Lender” rule, which took effect at the end of December. The rule dictates that a loan that includes a national bank as a lender can therefore rely on the OCC's national guidance rather than that of individual states. The controversy here is that many states have especially strong anti-usury provisions, which cap interest rates in the hope of preventing predatory lending. Today's complaint alleges that the OCC has not taken the concerns seriously:

      “While the OCC pays lip service to condemning predatory lending, it gives its wholesale endorsement to lending relationships predicated on evasion of usury laws designed to protect consumers.”

      The OCC, for its part, said upon announcing the rule that:

      “Banks lending relationships with third parties can facilitate access to affordable credit. However, increasing legal uncertainty regarding such relationships may discourage banks and third parties from partnering, limit competition, and chill the innovation that results from these partnerships. This may ultimately restrict access to affordable credit.”

      In their complaint from today, the state regulators claim that the OCC overstepped its authority by overriding — or preempting— state law. They say the regulator also violated the Administrative Procedure Act in rushing its rule out the door without taking comments on its rule proposal seriously. Moreover, the regulators ask the court to “declare that the OCC violated the APA because its True Lender Rule is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

      The OCC declined Cointelegraph's request for comment on the litigation.

      At the end of December, an association of state banking regulators filed similar complaints against the OCC for its work to charter a non-depository blockchain lending platform as a national bank. Those regulators assured Cointelegraph that it was the principle of the OCC's preemption that was the core legal issue.

      Meanwhile, just last night, the OCC sent out a new interpretive letter that would allow national banks to run nodes for stablecoin networks. For this and similar rulemakings, Brooks has become a folk hero among the crypto community since taking over as Acting Comptroller in May.

    •   #Government

    •   #Banking

    •   #Banks

    •   #US Government

    •   #Lending

    •   #Regulation

      Related News

    •   Why contests are better than grants for a healthy crypto community

    •   New name, old problems? Libras rebrand to Diem still faces challenges

    •   Demystify 2021 with crypto trend predictions from the Cointelegraph crew

    •   A storm is brewing between state regulators and the OCC over fintech licensing

    •   File comments against new crypto FinCEN rule, Coin Center leader urges

    •   BitGo settles with US Treasury over sanctions violations in Iran, Syria and Cuba


      Editors Choice

    •   States sue the OCC and Brian Brooks for overriding their controls on predatory lending

    •   Who said you can't spend crypto? Redditor sells free Moon tokens to pay rent

    •   Institutions are thrilled that youre selling, suggests OKCOIN COO

    •   5 reasons why Bitcoin price just reclaimed $33,000

    •   Bitcoin could hit $146K long-term by 'crowding out gold,' says JPMorgan

      Cointelegraph YouTube Subscribe

      Advertise with us

      Bitcoin BTC/USD

      34,014.33 +8.79%

      Ethereum ETH/USD

      1,099.94 +7.80%

      Litecoin LTC/USD

      157.68 +4.64%

      Ripple XRP/USD

      0.23 -2.00%


      2.89 +5.02%