Americans for Tax Reform released a letter to Senators opposing S.J.Res. 15, a joint resolution to invoke the Congressional Review Act and repeal the Office of the Comptroller of the Currency’s 2020 True Lender Rule. The rule established a regulatory framework for partnerships between financial technology businesses and banks to extend credit services and other financial service tools to millions of Americans.

The 2020 OCC True Lender Rule treats banks as the “true lender” when they appropriately identify themselves as the lender in loan agreements offered by financial technology businesses to meet the needs of consumers. Fintech businesses and their mobile phone applications have become popular with many consumers, especially during the Covid-19 healthcare emergency. Many fintechs do not have a national banking charter and often partner with financial institutions that do, allowing them to extend financial services to millions.

Senate Democrats opposed the rule, with Sen. Chris Van Hollen (D-Md.) introducing S. J. Res. 15 using the Congressional Review Act process to overturn the rule with a simple majority vote. Under the CRA, Congress has 60 legislative days after the final rule has been published in the Federal register to issues a resolution that disapproves and overturns a federal agency’s rules, preventing the agency from issuing a substantially similar rule in the future.

Along with the introduction of S. J. Res. 15, Sen. Van Hollen stated, “When this rule was finalized in October, I vowed to use every tool at our disposal to strike it down. Today, we’re one step closer to fulfilling that. We will not let this rule stand.”

However, with nearly 7 million Americans who remain unbanked and underbanked, the True Lender Rule provided legal certainty for many of these bank and fintech partnerships and mobile phone services that have been widely adopted by consumers. Sen. Van Hollen’s resolution will ultimately harm many of these same Americans who need access to affordable financial service products the most.

Americans for Tax Reform supports the innovative solutions and competition provided by national banks and fintech business. By restricting these forms of credit, Democrats will further harm the same people they claim they are protecting. Americans for Tax Reform strongly opposes S.J.Res. 15 and any Congressional action that seeks to restrict access to credit markets.

Click here or see below to view the letter.

May 11, 2021

Dear Majority Leader Schumer, Minority Leader McConnell, Chairman Brown, and Ranking

Member Toomey:     

On behalf of Americans for Tax Reform, I am writing to express our opposition to S. J. Res.  15, which seeks to use the Congressional Review Act to repeal the Office of the Comptroller of the Currency’s 2020 True Lender Rule. Under President Trump’s Administration, this rule was designed to assist the 7 million Americans who remain unbanked and underbanked. Should Congress move to overturn this rule, it would directly harm many of these same Americans who need access to affordable financial services the most.  

The OCC’s 2020 True Lender Rule treats banks as the “true lender” if they fund or identify themselves as a lender in the loan agreement provided to customers in partnership with financial technology businesses. Many customers have built trustworthy relationships with financial technology businesses that provide access to customers through mobile phone applications. This relationship has successfully provided access to credit for millions of Americans and the OCC’s rule provides legal certainty for the growing number of partnerships between banks and financial technology partners.

The Federal Reserve reported that 40% of American households are unable to afford a $400 emergency. Repealing the True Lender Rule would cut off a lifeline to the millions of households across the country that may depend on short-term financing. Economists at the Mercatus Center found that in the absence of legal credit, borrowers will continue to seek financing through illegal alternatives. Loan sharks and other illegal loan providers operate outside of any regulatory supervision and use tactics like blackmail, coercion, and violence when desperate borrowers fail to repay their loans.

Partnerships between banks and financial technology companies promote innovation and efficiency for servicing consumer needs. When financial technology businesses can serve as credit providers, they can offer quick financing solutions. Their services assist the 25% of US households that are unbanked or underbanked and do not have the means to access traditional or affordable products and services.

In addition, by invalidating the rule through the CRA, Congress would create significant legal barriers to existing borrowers and the services they enjoy.

Americans can make appropriate financial decisions that meet their needs when more competition exists for them to choose from in the credit markets. Americans for Tax Reform strongly opposes S. J. Res. 15 and we urge members of Congress to vote against this legislation.


Grover G. Norquist
President, Americans for Tax Reform