‘True Lender’ Rule Not Fully Dead Despite Congressional Repeal

Federal regulators have options if they want bring back another version of the “true lender” rule that was repealed by Congress through a process meant to discourage the return of a substantially similar proposal.

The Trump-era rule made banks the “true lender” on loans issued in partnership with fintechs, triggering consumer advocates’ fears that online lenders were “renting” national banks to evade states’ interest rate caps.

Supporters of the rule, issued in October, heavily opposed Congress’ June 24 move to repeal it through the Congressional Review Act. They feared the CRA’s restriction on agencies from bringing back a “substantially similar” ...