News & Impact Stories

Trump Fintech Order Will Promote Predatory Lending, Endanger Consumer Funds

May 20, 2026 — Press Release

Order Could Enable Payday Lenders to Ignore State Consumer Protection Laws and Skip Guardrails to Get Bank Charters

WASHINGTON – President Trump’s Executive Order on financial technology, issued last night, instructs federal financial regulators to remove barriers for predatory rent-a-bank schemes and other risky arrangements between fintechs and banks, and to make it easier for nonbank companies to become banks. The order comes as the Administration considers the national bank charter applications of two predatory lenders, Enova and OppFi, that charge 100% to 300% APR. 

“This order is an assault on consumers and on federal and state laws that protect people from high-cost loans and other risky products,” said Lauren Saunders, senior attorney at the National Consumer Law Center (NCLC). “Today, every predatory lender calls itself a ‘fintech.’ This order promotes rent-a-bank schemes and allows predatory lenders to become national banks that offer 100%+ APR loans nationwide, despite laws prohibiting them in 45 states.” 

The order directs agencies to weaken guardrails for “fintech firms” – using a definition of fintech firm that is so broad as to include virtually any company that uses a computer, except for banks. And regulators are told to focus on reducing scrutiny of “small and emerging” fintech firms, even as these companies are the ones with the least experience and knowledge about banking services and the ones most likely to create risk for consumers. 

The order instructs federal financial regulators to make it easier for “fintech firms” to enter into “partnerships” with banks and other federally regulated institutions and to make it easier and faster for fintech firms seeking bank charters and deposit insurance. Yet the result of many of these partnerships is rent-a-bank schemes and purchased charters used to evade state interest rate limits and other consumer protection laws.Nonbank companies have used rent-a-bank schemes to launder their loans through out-of-state banks in order to charge high interest rates, typically 100% APR or higher, that most states prohibit.

The order also encourages the integration of crypto (“digital assets”) into every area of the U.S. financial system. For example, the Executive Order requests the Federal Reserve Board to develop procedures for allowing nonbank companies and uninsured crypto banks to access Federal Reserve master accounts and payment rails. Doing so would create large and unquantified risks to the stability of the financial system and the economy.

“Giving crypto companies and other uninsured payment apps access to Fed accounts will make it easier for companies to offer risky types of accounts, putting consumer funds – and the entire economy– at risk,” said Carla Sanchez-Adams, senior attorney at NCLC. “These accounts can mimic bank accounts but without clear consumer protections against fraud or deposit insurance, creating confusion for consumers who may be left holding the bag when problems inevitably occur.” 

“The Trump Administration should not make it easier for predatory lenders to evade state interest rate limits, which are broadly supported by the American public,” said Saunders. “At a time of an affordability crisis, and with the Consumer Financial Protection Bureau gutted and no longer focusing on companies that are not banks, it is reckless to relieve nonbank fintech companies of commonsense oversight and consumer protection regulations.”

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