The payday lending program was conducted on an unsafe and unsound basis, in violation of a multitude of standards of safe and sound banking, compliance requirements, and OCC guidance.

"Eagle had effectively turned over the management of the bank's main business to a third party, and then virtually ignored how that business was being conducted," Comptroller of the Currency John D. Hawke said. "The bank essentially rented out its national bank charter to a payday lender in order to facilitate that nonbank entity's evasion of the requirements of state law that would otherwise be applicable to it."

Other practices criticized by the OCC included Eagle's lack of knowledge that Dollar had actively promoted rollovers of payday loans booked by the bank by providing an incentive to Dollar's employees, which resulted in a higher volume of rollovers than new loan originations and misuse of the loan product for long-term credit.

"This case demonstrates the dangers inherent in arrangements under which national banks rent out their charters to nonbank providers of financial services," said Hawke. "Not only did Eagle allow itself to become a mere appendage to Dollar, but it effectively collaborated in Dollar's scheme to evade state law requirements that would otherwise be applicable to it." [email protected]