Legal Seminar, Denver, CO

High‐cost lenders have continue rent‐a‐bank schemes using FDIC‐supervised banks:

• CashCall made loans up to 99% in Maryland and West Virginia using First Bank of  Delaware and First Bank & Trust, but courts later shut them down.

• Elevate makes loans at 100% interest using Republic Bank & Trust in Kentucky,  ignoring the voter‐approved 36% or lower rate caps in Arkansas, Montana, South  Dakota and other states. • On Deck Capital makes small business loans with rates that go up to 99.7% APR,  originating loans through Celtic Bank in states where it cannot make the loans  directly.

State Usury Laws Remain Critical Protection

“Congress did not intend to authorize such arrangements when it created national banks  with the National Bank Act in 1864, which also gave national banks the right to preempt  state usury laws….[S]tate usury laws have long served an important consumer protection  function in America.” ‐ Bi‐Partisan AG coalition letter to Congress, July 2018, https://bit.ly/2NoMIu1 “The ability to export interest rates across states lines – like the benefit of deposit insurance  – is a privilege afforded only to banks, in part, because they must comply with a host of  “cradle‐to‐ grave” regulations... Non‐bank lenders do not have the same connection to the  federal safety net, and the regulatory structures and requirements for these lenders reflects  the decisions of the duly elected state legislatures about the credit needs of their  communities.” ‐ CSBS letter to Congress, May 2018, https://bit.ly/2Ltpan2 “The OCC views unfavorably an entity that partners with a bank with the sole goal of evading  a lower interest rate established under the law of the entity’s licensing state(s).” ‐ OCC Principles on Short‐Term, Small Dollar Installment Lending, May 2018