Predatory lending by Utah-based TAB Bank could lead to an ARC rating downgrade
Utah – A coalition of consumer advocates has filed comments with the Federal Deposit Insurance Corporation (FDIC), including a petition signed by more than 44,500 people and a letter outlining hundreds of consumer complaints, urging the FDIC to consider the Utah-based Transportation Alliance Bank (TAB Bank) bank lease predatory loans to assess the bank’s ability to meet community needs under the Community Reinvestment Act.
As the FDIC prepares to conduct a Community Reinvestment Act (CRA) review of Utah-based TAB Bank – which works with EasyPay Finance to trick consumers into predatory lending for auto repairs, tires, furniture and even pets – the Stop the Debt Trap coalition filed a petition with the FDIC signed by more than 44,500 people.
The petition notes that “the typical predatory loan borrower will make payments for months that go mostly to interest and do little to repay the loan,” and urges the FDIC to stop “the Transportation Alliance Bank and any other bank to front predatory lenders state interest rate caps.
In addition to the petition, the Coalition submitted a CRA comment letter to the FDIC outlining hundreds of consumer complaints filed against TAB Bank’s lending partner, EasyPay Finance. The letter claims that EasyPay issues loans on behalf of TAB Bank and that the bank is responsible for its conduct. The letter concludes: “The FDIC should lower TAB Bank’s CRA rating in light of the extensive evidence of predatory lending and potential violations of law it facilitates. High cost credit that extracts wealth and burdens debt-ridden borrowers does not meet credit needs responsibly and should be penalized in CRA reviews.
In its comment letter, the coalition states, “In assessing whether TAB Bank is adequately serving its communities, the FDIC should consider not only access to credit, but also the quality of credit extended. Predatory credit at high interest rates that borrowers cannot afford to repay, credit designed to evade state interest rate laws, credit resulting from deceptive practices, and credit resulting in violations of debt collection, credit reporting and other laws meet the convenience and needs of communities.
Today’s action follows reports by the Stop the Debt Trap Coalition into predatory puppy loans and predatory car repair loans by EasyPay Finance and TAB Bank, showing that hundreds of consumers have filed complaints describing outrageous interest rates hidden in fine print, deceptive promises of discounts, and payments that go mostly to interest. These loans often result in damaged credit reports and debt collection activity. Another report details harm to veterans and military families, as well as potential violations of the Military Loans Act, which generally prohibits interest rates above 36% for military members and dependents.