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Congress acts to stop lenders charging sky-high interest rates

Stefani Reynolds/Bloomberg

EasyPay Finance, a consumer lender that charges ultra-high interest rates, may soon find it more difficult to operate in Massachusetts, following two recent votes in Congress.

On Thursday, the House voted, 218 to 208, to strip away a regulation promulgated during the Trump administration that made it easier for EasyPay and other nonbank lenders to make loans with interest rates ranging as high as 189 percent.

The House vote came six weeks after the Senate voted, 52 to 47, to overturn the Trump administration rule. In both the House and Senate, the measure was supported by all Democrats, and a few Republicans.


President Biden is expected to sign it into law.

“Cracking down on predatory lending schemes is a priority as we undo the damage Trump caused,” Representative Jake Auchincloss said in a statement after the vote.

“Congress is taking the necessary steps to make sure our economy is working for everyone,” said Auchincloss, vice chair of the House Financial Services Committee.

EasyPay is one of about a dozen nonbank lenders that have been targeted by a broad coalition of community groups, including the Boston-based National Consumer Law Center, Americans for Financial Reform, and Public Citizens.

“Congress has taken a critical step to stop this kind of predatory lending that can trap people in debt and destroy their lives,” said Lauren Saunders, associate director of the National Consumer Law Center. “We urge President Biden to swiftly sign the resolution.”

Of the dozen lenders targeted by the community groups, EasyPay is the only one that now operates in Massachusetts.

EasyPay is offered at about 100 auto repair shops and a handful of pet stores in Massachusetts. Auto shop owners interviewed last month said they let customers know about EasyPay if they have no other options for paying for repairs.


A loan can be arranged in hours, entirely online and via text messages. When the loan is approved, EasyPay makes a deposit covering the cost of repairs directly into the shop owner’s bank account (minus a 2.99 percent fee).

EasyPay says on its website that loans are available “whether you have good credit or no credit” and without putting any money down.

EasyPay requires applicants to have a cellphone, e-mail address, and bank account for preauthorized debits. Applicants must have at least $750 in income per month, according to the EasyPay website. Loan amounts range from $350 to $5,000.

In Massachusetts, on a $2,000, two-year loan, the interest cap is 24 percent, according to the National Consumer Law Center. Under those terms, the monthly payment would be about $106 and total interest $538.

But at 189 percent interest, the monthly payments on the same loan would be about $325, and the total interest almost $5,800, more than 10 times more than the state cap on interest allows.

EasyPay gets around the Massachusetts usury law by being affiliated with a bank headquartered outside the state, which cuts off the state’s authority to regulate it. But the National Consumer Law Center and other critics say the affiliation is a sham that allows EasyPay to skirt the law.

EasyPay is affiliated with TAB Bank, based in Utah, according to recent testimony before the Senate Banking Committee. A representative of the Center for Responsible Lending told that committee that TAB Bank is “helping EasyPay Finance make predatory loans for . . . pets, auto repairs, and other products.”


EasyPay did not respond to an e-mail seeking comment.

The bill passed by Congress would allow state attorneys general to investigate whether the affiliations of lenders with banks is for the purpose of evading state usury laws. Such investigations are now blocked by the Trump administration rule.

The office of Attorney General Maura Healey enforces state interest rate caps.

“This will help bolster my office’s ongoing efforts to take action against unfair loans and other abusive high-interest debt traps,” Healey said in a statement after the vote.

Got a problem? Send your consumer issue to sean.murphy@globe.com. Follow him @spmurphyboston.