Amicus Brief of the Center for Responsible Lending, National Consumer Law Center, and National Community Reinvestment Coalition in support of the Appellant.
This case concerns the authority of the Office of the Comptroller of the Currency (OCC) to extend the privileges of national banks to entities that do not accept deposits and are not banks in any traditional or legal sense. The foremost reason why nonbanks will seek out a “special purpose national bank” is to take advantage of preemption of state consumer protection laws, particularly interest rate caps. High cost predatory lenders are eager to evade state laws that limit them from charging usurious rates.
Allowing the OCC to grant national bank charters to nonbank lenders will eviscerate the fundamental power that states have had since the time of the American Revolution—to cap interest rates to protect their residents from predatory lending. Extending bank preemption here would disregard Congress’s decision to curtail preemption rights for nonbanks, to rein in the OCC’s power to preempt state consumer protection laws, and to vest federal authority over nonbanks with the Consumer Financial Protection Bureau (CFPB).