D.C. Council member Kenyan McDuffie (I-At Large) has introduced the Protecting Affordable Loans Amendment Act of 2023.
The bill is the result of collaboration between the Office of the D.C. Attorney General (OAG), the city’s Department of Insurance, Securities and Banking (DISB) and the council’s Committee on Business and Economic Development. McDuffie chairs the committee.
The legislation strengthens the tools available for both DISB, the District’s banking regulator, and OAG, the law enforcement agency charged with protecting consumers. The proposed bill would exercise the District’s right to opt out of the federal requirement that the city apply the interest rates of state-chartered federally insured banks. It also closes the federal loophole that allows foreign (non-District) state-chartered banks to import usurious interest rates and largely end the explosion of nontraditional, fintech-enabled efforts targeting District consumers with these types of predatory loans.
“We must eliminate loopholes that permit non-District banks from taking advantage of our residents through the use of exorbitant interest rates,” McDuffie said. “Our local usury cap exists to guard against this abuse. This change will allow us to protect District consumers from predatory lenders that ruin their credit scores and jeopardize their financial security.”
Since 2020, OAG has secured over $9.2 million in refunds and debt forgiveness from lenders who deceived city borrowers.
D.C. Attorney General Brian Schwalb praised the McDuffie legislation for “closing a loophole in our existing law and enhancing the protection of D.C. consumers.”
James Wright Jr. is the D.C. political reporter for the Washington Informer Newspaper. He has worked for the Washington AFRO-American Newspaper as a reporter, city editor and freelance writer and The Washington…
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Source: Washington Informer