Jason S. Miyares
Attorney General of Virginia

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Commonwealth of Virginia
Office of the Attorney General

Mark Herring
Attorney General

202 North Ninth Street
Richmond, Virginia 23219


For media inquiries only, contact:  
Charlotte Gomer, Press Secretary
Phone: (804)786-1022 
Mobile: (804) 512-2552
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~ Herring joins coalition opposing FDIC proposed regulations that would allow predatory lenders to exploit consumers though deceitful "Rent-a-Bank” schemes ~

RICHMOND (February 5, 2020­) – Attorney General Mark R. Herring has joined a bipartisan coalition of attorneys general in opposing a proposal by the Federal Deposit Insurance Corporation (FDIC) to preempt state usury laws that regulate payday and other high-cost lending. Usury laws prevent predatory lenders from taking advantage of consumers by charging extremely high interest rates on loans. The FDIC's proposed regulations would enable predatory lenders to circumvent state usury laws through "rent-a-bank” schemes, in which banks act as lenders in name only, passing along their state law exemptions to non-bank payday lenders. Attorney General Herring and his colleagues previously opposed a similar proposal from the Office of the Comptroller of the Currency.


"The Trump Administration has shown time and again that it is more concerned with giving predatory lenders more ways to exploit folks than it is with actually protecting borrowers,” said Attorney General Herring. "It is critical that Virginia, and other states, have the ability to protect consumers from predatory lenders and high-interest loans. Protecting Virginians from exploitative predatory lenders has been a top priority for me as attorney general and I intend to keep fighting to maintain those protections.”


States historically have played a critical role in protecting consumers from predatory lending, using rate caps to prevent the issuance of unaffordable, high-cost loans. While federal law provides a carve out from state law for federally regulated banks, state law continues to protect residents from predatory lending by non-banks such as payday, auto title, and installment lenders. The new regulations proposed by the FDIC would extend the Federal Deposit Insurance Act exemption for federally regulated banks to these non-bank debt buyers, a sharp reversal in policy that deliberately evades state laws targeting predatory lending.


Attorney General Herring and his colleagues argue that the FDIC's attempt to extend preemption to non-banks conflicts with the Federal Deposit Insurance Act, exceeds the FDIC's statutory authority, and violates the Administrative Procedure Act. 


Attorney General Herring created the OAG's first Predatory Lending Unit to investigate and prosecute suspected violations of state and federal consumer lending statutes, including laws concerning payday loans, car title loans, consumer finance loans, mortgage loans, mortgage servicing, and foreclosure rescue services. The Unit also focuses on consumer education so Virginians are aware of the potential risks of these loans, as well as alternatives.


During his administration, Attorney General Herring's Predatory Lending Unit has successfully brought enforcement actions against, among others, motor vehicle title loan lenders, online payday lenders, mortgage servicing companies, and pawnbrokers.


If a borrower believes their rights have been violated, or that their lender may have violated lending statutes, they should contact Attorney General Herring's Consumer Protection Section to file a complaint or to get additional information about any consumer protection related matter:



Joining Attorney General Herring in filing the comment letter are the attorneys general of California, Colorado, Connecticut, the District of Columbia, Hawaii (AG and Office of Consumer Protection), Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Tennessee, Vermont, Washington, and Wisconsin. 


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