Payday loan providers are exploiting loopholes to evade MaineвЂ™s customer security guidelines. Their s hadowy techniques a re leaving Mainers into the lurch. Now, the Trump management is drifting a guideline modification that could let predatory corporations fleece families into the complete light of time.
Due to the established reputation for abusive and unjust methods , Maine has generated a few restriction ations from the payday financing industry , such as for example c aps on costs and rates of interest , that offer some security to Mainers.
But, organizations such as for example OppLoans and EasyPay Finance are employing a scheme referred to as вЂњ rent-a-bank вЂќ to evade Maine вЂ™s rules . As opposed to lending to Mainers straight, these businesses are searhing for out banks in states without having the consumer that is same in place. These banks go ahead and charge interest rates in excess of MaineвЂ™s lending cap outside the jurisdiction of MaineвЂ™s regulations.
The lender then turns around and offers its loan to your payday loan provider operating in Maine, that may claim the loan just isn't at the mercy of MaineвЂ™s laws and enjoy profits that are excess skirting regulations.
Because there is no federal legislation against rent-a-bank schemes, the training has existed i n a appropriate grey area since 2013, each time a court ruled up against the training. The ruling curbed the training, but didnвЂ™t cure it completely.