regulation
Bulletins

OCC's 'true lender' rule repealed by House

The Trump-era regulation allowed fintechs to partner with banks in states without interest rate caps to offer high-interest loans.

The Capitol Building​

The House just voted to repeal the OCC's "true lender" rule.

Image: Caleb Perez/Unsplash/Protocol

The U.S. House of Representatives on Thursday voted to repeal a rule which allowed nonbank lenders, including fintech startups, to partner with banks in states without interest-rate caps to offer higher-interest loans than would otherwise be permitted.

The House voted 218-210 to pass a Congressional Review Act resolution which revoked the so-called "true lender" rule issued by the Office of the Comptroller of the Currency, according to the Hill.

The Senate passed a similar resolution in May. President Biden is expected to sign the bill. The use of the Congressional Review Act also bans the OCC from issuing another similar rule.

Fintech startups and other supporters of the rule argued that it made it easier for them to offer credit and would force them to navigate a confusing quilt of state regulations. Opponents of the rule said it enabled predatory lending and overruled state regulations.

Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

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