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Groups Urge Downgrade To CRA Rating For Utah-Based TAB Bank

TAB Bank should be penalized in its ongoing Community Reinvestment Act (CRA) exam for facilitating high-cost, low-transparency loans by a non-bank third party, the National Community Reinvestment Coalition (NCRC) and 39 community organizations said Thursday.

TAB Bank is renting out its bank charter to a non-bank lender whose business model has prompted numerous complaints from consumers – a plain contradiction to the spirit of CRA oversight,” NCRC President and CEO Jesse Van Tol said. “CRA evaluations should consider qualitative aspects of lending practices. TAB Bank’s partnership with EasyPay is causing direct harm, and the FDIC should downgrade its CRA rating accordingly.

NCRC on Thursday filed a formal comment letter on the matter to the Federal Deposit Insurance Corporate (FDIC), co-signed by 39 fellow organizations, detailing TAB Bank’s conduct and the evidence it defies CRA requirements.

The FDIC is currently evaluating Transportation Alliance Bank, commonly known as TAB Bank, for compliance with CRA rules. TAB Bank has one physical branch but partners with non-bank lender EasyPay to allow the latter company to offer point-of-sale financing to shoppers in stores across the country. In formal complaints filed against EasyPay’s parent company Duvera Billing Services through the Consumer Financial Protection Bureau (CFPB), many consumers say that retail clerks led them to believe that the loans were interest free, when in fact they came with rates of as high as 188%. NCRC continues to call on regulators to prevent chartered banks from partnering with non-banks to facilitate loans that evade state interest rate caps.

CRA examinations score banks partly on how their products serve the convenience and needs of the communities where they operate. TAB Bank seems to be doing poorly by this standard, judging by the hundreds of CFPB complaints about TAB Bank’s EasyPay partner: The EasyPay customers TAB Bank is making available to Duvera report confusion and alleged deception in loan terms, difficulty in getting TAB Bank’s partner to fix errors in their accounts and false reporting to credit bureaus.

A downgrade from FDIC examiners could potentially limit TAB Bank’s ability to expand its operations and help raise awareness of the concerning aspects of both EasyPay itself and the rent-a-bank practices underlying the partnership between the firms.

More information on TAB Bank and EasyPay is available here. Interested parties can join a petition urging stricter oversight of the companies here. More information on rent-a-bank regulatory workarounds in general can be found here.

The following 40 organizations signed the comment letter:

National

National Community Reinvestment Coalition
Consumer Federation of America

Arizona

Pima County Community Land Trust

California

ASIAN, Inc.
California Coalition for Rural Housing
California Reinvestment Coalition
Vermont Slauson EDC
People’s Opportunity Fund

Delaware

727 Mgt LLC
Delaware Community Reinvestment Action Council, Inc.

Florida

African American Alliance of CDFI CEOs
Best of the Bess Inc
Real Estate Education And Community Housing
St. Petersburg Neighborhood Housing Services, Inc. dba Neighborhood Home Solutions
Community Reinvestment Alliance of Florida
Goldenrule Housing & Community Development

Georgia

Neighborhood Improvement Association
Georgia Advancing Communities Together, Inc.

Illinois

Woodstock Institute

Indiana

Gary Housing Authority/Northwest Indiana Development Corporation (NIDC)

Massachusetts

CSN
Springfield NHS

Maryland

PFC Black Chamber of Commerce Inc
Maryland Consumer Rights Coalition

Maine

Coastal Enterprises, Inc.

Michigan

Detroit People’s Platform

Minnesota

Jewish Community Action

Missouri

St. Louis Equal Housing & Community Reinvestment Alliance (SLEHCRA)

Mississippi

MS Communities United for Prosperity (MCUP)

North Carolina

Welfare Reform Liason Project (WRLP)
Sandhills Community Action Program, Inc.

New York

Devotion USA, Inc.
Fair Finance Watch
Rockland Housing Action Coalition, Inc.

Ohio

Homes on the Hill CDC

Oregon

CASA of Oregon

Pennsylvania

Ceiba

Texas

Southern Dallas Progress Community Development Corporation
TCH Development, Inc

Wisconsin

Newcap, Inc.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

Complete the form to download the full report: