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A Big Win for Consumers
Plus stories on school funding and unemployment benefits
In a 52–47 vote, the U.S. Senate voted to overturn the OCC’s “fake lender” rule, which allows predatory lenders to evade state interest rate laws by putting a bank’s name on the paperwork. S.J. Res. 15, a resolution under the Congressional Review Act (CRA), was introduced by Senators Chris Van Hollen (D-MD) and Sherrod Brown (D-OH). Rep. “Chuy” García introduced a parallel resolution, H.J. Res. 35, in the U.S. House of Representatives. Now that the Senate approved the resolution, the House has until the end of this legislative session to vote on it.
Still, a Mainstream Bank Offers a 260% Interest Rate Product
Under the guise of helping consumers with low balance bank accounts avoid fees, Fifth Third Bank is now offering a new product based on a current account feature called Early Access.
The new product, MyAdvance, allows customers to take out an advance of between $50 and $1000 against their next direct deposit. Based on the fees or rates charged for Early Access, customers would pay a 5% fee for advances taken out in the first 18 months of using the product and 3% thereafter. These numbers represent an effective APR of 260% if an advance is taken one week before payday.
Tennessee Governor Drastically Cuts Unemployment Benefits
In a state that has no official minimum wage and has repeatedly refused Medicaid expansion, Gov. Bill Lee announced yesterday that he is opting the state out of federal assistance to provide additional unemployment benefits to the thousands of Tennesseans who are out of work due to the COVID-19 pandemic.