‘Rent-a-banks’ involving Utah high-interest lending dropping under scrutiny of Congress

Consumer groups state that high-interest loan providers — who issue such things as payday or vehicle title loans — are using a way that is novel evade state rate of interest caps nationwide: They partner with banking institutions in Utah, which places no limitation on prices.

In exactly what the teams call a “rent-a-bank scheme,” such loan providers solicit, structure and gather on loans that charge as much as 222per cent annual interest — however their partner banking institutions in Utah theoretically problem or support the loans to evade caps somewhere else. Continue reading