Rent-a-Bank: Bank Partnerships in addition to Evasion of Usury Laws

Rent-a-Bank: Bank Partnerships in addition to Evasion of Usury Laws

75 Pages Published: 17 Sep 2020

Adam J. Levitin

Georgetown University Law Center

Date Written: September 16, 2020

Abstract

“Rent-a-bank” arrangements would be the car of option for subprime loan providers wanting to avoid state usury, licensure, along with other customer security guidelines. A non-bank lender contracts with a bank to make loans per its specifications and then buys the loans from the bank in a rent-a-bank arrangement. The non-bank loan provider then claims to shelter within the bank’s federal exemptions that are statutory state legislation. Continue reading “Rent-a-Bank: Bank Partnerships in addition to Evasion of Usury Laws”