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Dear Congress: Do away with the rent-a-bank ruse

Feb 10, 2020 - American Banker

The current push by payday lenders to try to outflank state laws is but one reason Congress needs to act on a new proposal that would cap interest rates at 36%.

Modern payday lenders - offering the high-interest credit that has been called today's "loan sharking" and that started in the 1990s - are finding ways to circumvent state laws that prohibit or restrict exorbitant interest rates, sometimes more than outstripping 500%.

Payday lender contrivances take many forms, but one partic...