US Democratic lawmakers will introduce resolution to undo a Trump-era rule

US Democratic Senators will introduce a resolution aimed at undoing a Trump-era rule that defines when a bank is a ‘true lender,’ a Senator Chris Van Hollen’s office confirmed on Thursday.

The Review Act resolution to undo the measure comes after a coalition of liberal advocates to repeal rules introduced by regulators under the previous administration.

In October 2020, the Office of the Comptroller of the Currency (OCC) issued the rule in hopes of clarifying which party’s regulatory regime applies when banks team-up with non-banks to make loans.

The OCC said at the time that the rule clarifies a murky legal matter.

But Democrats argue that it will allow predatory lenders to skirt state consumer protections and usury laws by partnering with banks whose looser federal regulations pre-empt state rules.