Sign in Subscribe
Banks (Finance)

DC Cracks Down on Predatory Lenders EasyPay and TAB Bank

Strategic Insights

— 2 min read

The Office of the Attorney General of the District of Columbia announced a significant crackdown on predatory lenders EasyPay Finance and TAB Bank, forcing them to cease making loans with interest rates up to 198.98% and order them to pay $216,548.83 in restitution to consumers. The lenders, which offer loans through auto repair shops, pet stores, and furniture stores, had laundered their loans through Utah-based TAB Bank to evade DC's 24% interest rate limit. This move follows a series of reports highlighting EasyPay's predatory lending practices, including predatory puppy loans, auto repair loans, and loans that harm veterans and servicemembers.

Key Takeaways:

  • EasyPay Finance and TAB Bank have been forced to stop making loans with interest rates up to 198.98% in the District of Columbia.
  • The lenders will pay a total of $216,548.83, including over $150,000 in restitution to consumers.
  • EasyPay offers loans through auto repair shops, pet stores, furniture stores, and other retail locations.
  • The Office of the Attorney General of the District of Columbia has taken action against EasyPay and TAB Bank, following a series of reports highlighting their predatory lending practices.
  • Lauren Saunders, associate director of the National Consumer Law Center, praised the DC action, stating that it sends a message and pushes predatory rent-a-bank lenders out of the state.
  • Earlier lawsuits against OppFi and Elevate have also been instrumental in pushing predatory lenders out of DC.
  • Iowa has taken a unique approach by opting out of a federal law that allows out-of-state, state-chartered banks to ignore state interest rate laws.
  • The National Consumer Law Center has issued a Consumer Alert on EasyPay/TAB Bank's auto repair financing practices and has called on national auto repair chains to stop offering predatory loans.
  • Several groups highlighted TAB Bank's role in fronting for predatory loans in a letter to the FDIC, which later downgraded the bank's Community Reinvestment Act rating.
  • The groups have also urged the FDIC to take action against predatory rent-a-bank lending by FinWise Bank and three other banks.

Statistics:

  • $216,548.83: The total amount EasyPay Finance and TAB Bank are ordered to pay, including over $150,000 in restitution to consumers.
  • 198.98%: The highest interest rate offered by EasyPay Finance and TAB Bank.
  • 24%: The interest rate limit set by the District of Columbia.
  • $150,000+: The amount of restitution paid to consumers as part of the settlement.
  • 2022: The year when reports began highlighting EasyPay's predatory lending practices, including predatory puppy loans, auto repair loans, and loans that harm veterans and servicemembers.
  • 2: The number of states that have taken action against EasyPay Finance and TAB Bank, including the District of Columbia and Iowa.

Sources:

  • National Consumer Law Center
  • Office of the Attorney General of the District of Columbia
  • Transportation Alliance Bank (TAB Bank)
  • EasyPay Finance
  • FDIC
  • High-Cost Rent-a-Bank Loan Watch List (https://www.nclc.org/resources/high-cost-rent-a-bank-loan-watch-list/)
  • Predatory Puppy Loans by TAB Bank and EasyPay Finance (https://www.nclc.org/resources/predatory-puppy-loans-by-tab-bank-and-easypay-finance/)
  • Consumer Alert: Deceptive Auto Repair Financing Practices (https://www.nclc.org/resources/consumer-alert-deceptive-auto-repair-financing-practices/)
  • Predatory Auto Repair Loans by TAB Bank and EasyPay Finance (https://www.nclc.org/resources/predatory-auto-repair-loans-by-tab-bank-and-easypay-finance/)
  • Predatory Lenders TAB Bank & Easypay Finance Harm Veterans & Military Servicemembers (https://www.nclc.org/resources/report-predatory-lenders-tab-bank-easypay-finance-harm-veterans-military-servicemembers/)

Read more