Economy

States are suing OCC and Brian Brooks for overriding their controls on predatory lending

Eight states and the District of Columbia are suing the National Banking Regulatory Commission over a rule change that went into effect.

On January 5th Filing, New York Attorney General leads the indictment against the Office of the Currency Comptroller and Current Acting Comptroller Brian Brooks.

Back in October, the OCC set up its site The “true lender” ruleWhich came into effect at the end of December. The rule states that a loan that includes a national bank as a lender can thus be based on the OCC’s national guidance rather than individual country guidance. The argument here is that many countries have particularly strong anti-usury provisions, which set interest rates in the hope of preventing predatory lending. Today’s complaint alleges that the OCC has not taken the concerns seriously:

“While the OCC sparks its condemnation of predatory lending, it gives its blanket support to lending relationships based on the evasion of usury laws designed to protect consumers.”

For its part, the Chamber of Foreign Trade said when announcing the rule:

“Lending relationships between banks and third parties can facilitate access to affordable credit. However, increasing legal uncertainty regarding these relationships may discourage banks and third parties from partnering, reduce competition, and calm the innovation resulting from these partnerships. The end is to restrict access to obtain affordable credit. “

In their complaint from today, state regulators claim that the OCC has exceeded its authority by bypassing – or preempting – state law. They say the regulator also violated the Administrative Procedures Act in speeding up the exit the door without taking comments on its proposal seriously. Further, the regulators are asking the court to “declare that OCC has violated APA because the True Lender’s Rule is arbitrary, volatile, miscalculated, or otherwise inconsistent with the law.”

The ACC rejected Cointelegraph’s request for comment on the lawsuit.

At the end of December, the State Bank of Regulators Union filed similar complaints against OCC for its non-deposit blockchain rental business The lending platform as a national bank. These regulators assured Cointelegraph that the OCC safeguard principle is the primary legal issue.

Meanwhile, just last night, OCC sent a New interpretative letter That would allow national banks to operate a stablecoin networks contract. To these rules and the like, Brooks has become a popular champion among the crypto community since taking over as acting financial controller in May.