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Rent-a-Bank Schemes

Rent-a-Bank Schemes

Would-be loan providers have traditionally attempted to evade state usury guidelines utilizing rent-a-bank that is so-called: An out-of-state bank, which need not comply with rate of interest caps when you look at the payday lender’s state, will act as a front side for the business that’s really behind a high-interest loan so it couldn’t legally make it self. In return for “renting” itself down in this way—expending little effort and using small danger into the process—the bank gets a little cut regarding the action. (mais…)

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