The Office of the Comptroller of the Currency, which failed to control the reckless mortgage lending that helped cause the financial crisis, is widely regarded as a pushover among federal regulators. But the agency showed some welcome muscle and concern for consumer protection during a House hearing this week when it vigorously opposed a bill that would accelerate the growth of payday-style lenders who peddle predatory loans that can carry interest rates of 400 percent or more.
According to a new study by the Pew Charitable Trusts, many states have either disallowed payday lending or set price caps so low that the lenders go elsewhere. Under the bill in the House, however, the comptroller’s office would issue charters to the lenders, overriding state laws that now regulate the terms of a loan. Worse still, the bill is disingenuously cast as a compassionate measure that would help the very poor and “unbanked” citizens who would be most hurt by it.
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