At today’s HFSC’s hearing on “rent-a-banks,” Chairwoman Waters (D-CA) indicated that the committee will take action on legislation (H.R. 5050) to impose a national 36 percent usury cap for certain consumer loans. However, the chairwoman may face the same obstacles that blocked a vote last year. Today, some Democrats reiterated concerns, with Reps. Meeks (D-NY) and Scott (D-GA) worrying that it will negatively affect the ability of minority depository institutions to offer small dollar credit. Instead, they support limiting the number of payday loan rollovers and other provisions of the 2017 CFPB payday rule. Republicans were united in strong opposition to the bill, arguing that it would decrease credit availability and increase predatory illegal lending. On the other side, Reps. Garcia (D-IL) and Vargas (D-CA) favored the legislation and Rep. Green (D-TX) criticized GOP opponents for not offering an alternative. Although he is a cosponsor, Rep. Sherman (D-CA) was sympathetic to arguments that APR is not an appropriate way to measure the price of small-dollar credit. He also criticized the OCC’s “valid-when-made” proposal (see FSM Report PREEMPT31), saying that Congress should insert language into an appropriations bill to prevent finalization.
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