Comments due on OCC's 'True Lender' proposed rule
The OCC has proposed a rule that would determine when a national bank or federal savings association (bank) makes a loan and is the “true lender” in the context of a partnership between a bank and a third party.
Banks’ lending relationships with third parties can facilitate access to affordable credit. However, the relationships have been subject to increasing uncertainty about the legal framework that applies to loans made as part of these relationships. This uncertainty may discourage banks and third parties from entering into relationships, limit competition, and chill the innovation that results from these partnerships—all of which may restrict access to affordable credit.
The proposed rule would resolve this uncertainty by amending 12 CFR Part 7 to specify that a national bank or federal savings association makes a loan and is the “true lender” if, as of the date of origination, it (1) is named as the lender in the loan agreement or (2) funds the loan. Comments on the proposal will be accepted through September 3, 2020.
PUBLICATION UPDATE: Published at 85 FR 44223 on 7/22/2020.