HOPE Submits Responses Opposing OCC Real Lender

Please find underneath the remarks associated with Hope Enterprise Corporation / Hope Credit Union/Hope Policy Institute (HOPE) as a result to your OCC Notice of Proposed Rulemaking, National Banks and Federal Savings Associations as Lenders, HOPE is really a credit union, community development institution that is financial policy institute that delivers affordable economic solutions; leverages private, public and philanthropic resources; and partcipates in policy analysis to satisfy its objective of strengthening communities, building assets, and improving everyday lives in economically troubled areas throughout Alabama, Arkansas, Louisiana, Mississippi and Tennessee. Throughout the last 25 years, HOPE has created over $2.5 billion in funding that includes benefited significantly more than 1.5 million people.

Because of the experiences of y our members, described herein, we have been concerned that the OCC proposition will rather add to than alleviate, the burdens of high expense financing within our area. In most five Deep South states, high price lenders, such as for example payday and vehicle name lenders, already are saturating our communities. For instance, in 2017 in Tennessee, there have been over 1,200 cash advance storefronts, a lot more than McDonald’s and Walmart places combined. 1 when it comes to charges drained by payday and vehicle name loan providers, Mississippi, Alabama, Louisiana, and Tennessee come in the very best ten states, and cost that is high strain a lot more than $1.6 billion each year from low earnings borrowers in these four states. 2

These loans were specially harmful in the period of COVID 19, magnifying the crisis that is financial. HOPE people paid over $54,000 to lease a bank loan providers within the last few 3 months alone.

This amount that is staggering the hefty burden of our users’ relationship with predatory loan providers, especially at any given time when individuals are straining to produce ends talk with reduced costs and requiring economic cushions to keep house to remain safe. This really is especially true for low income households when you look at the Deep Southern, where in states like Mississippi, Alabama, Tennessee, and Louisiana over fifty percent of households making $35,000 have seen income loss because the pandemic. 3 For Ebony households, that are disproportionately targeted by predatory loan providers, significantly more than 1 in 2 in all of our Deep South states have likewise skilled loss in employment earnings. We now have additionally seen just just just how portions of people’s COVID economic relief, such as for example stimulus payments, happens to be reduced by portions of the funds www loan by phone com approved planning to payday loan providers instead of basic requirements.

Currently, there clearly was one or more cost that is high in most state within the Deep Southern area making these loans through the bank partnership arrangement. See Appendix. The OCC proposition advances the dangers that more high price loan providers will draw out extra charges, along with the prepared support of partnering banks. We observe that up to now, these arrangements include just FDIC supervised banks. Nevertheless, the OCC proposition may start the entranceway for nationwide banking institutions to enter such partnerships as well.

HOPE’s concerns concerning the harms among these loans aren’t hypothetical. HOPE users have now been caught by loans facilitated by lease a bank partnerships, placing their economic success in danger and so irritating our objective to construct wide range among low earnings communities and communities of color within the Deep South. While lease a loans are hailed as accessible credit when it comes to economically susceptible, we all know the contrary to be real. Individuals are maybe not being harmed because of the lack of the loans supported by the OCC proposition; instead, it’s the existence of extra high loan price loans this is the issue. If promulgated by this guideline, the expansion of those high price loan items will further exacerbate the monetary strain of low earnings borrowers into the Deep South.