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Late Friday @USOCC sneaked out a profoundly troubling one-page order on bank sponsorship of payday loans. The Trump admin is rescinding a 2002 restriction on #RentABank partnerships with the notorious payday lender @ACECash. Reactions in this thread: occ.gov/static/enforce…
1/ Throughout most of American history nearly every state had state interest rate caps prohibiting payday loans. In 1978 the Supreme Court controversially held the state interest rate cap of a bank’s home state applies when the bank “export’s” its loans across state lines.
2/ This decision sparked a race to the bottom in credit card lending where SD, DE, and UT eliminated their usury laws to attract banking jobs. Now, state usury limits effectively no longer apply to banks. But state usury laws DO apply to payday loan companies.
