The National Risk Committee (NRC) of the Office of the Comptroller of the Currency (OCC) published its Semiannual Risk Perspective Fall 2020 on November 9. The semiannual report included numerous findings with respect to the health of the nation’s national banks and federal savings banks, including the following:
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Christina Grigorian
OCC Issues Final “True Lender” Rule
The Office of the Comptroller of the Currency (OCC) published a final rule on October 27 that adopts a “bright line test” for determining when a national bank or federal savings bank (bank) is the “true lender” in connection with a loan originated pursuant to a third-party partnership (Final Rule). Under the Final Rule, a Bank makes a loan when it, as of the date of origination, (1) is named as the lender in the loan agreement; or (2) funds the loan. In cases where one bank is named as the lender in the loan agreement and another bank funds the loan, the bank named as the lender in the loan agreement is deemed to have “made” the loan.
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Banking Agencies Issue Proposed Rule Addressing Role of Supervisory Guidance
On October 20, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau (CFPB), and the National Credit Union Administration (each, a Banking Agency, and collectively, the Banking Agencies) published a proposed rule (the Proposed Rule) that would codify the Interagency Statement Clarifying the Role of Supervisory Guidance issued by the Banking Agencies on September 11, 2018 (the 2018 Statement). The 2018 Statement provided that regulatory guidance did not have the force and effect of law and did not create binding obligations on the public.
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Federal Reserve Begins Census of Commercial Lenders
The Board of Governors of the Federal Reserve System initiated its 2020 Census of Finance Companies and Other Lenders (Census) with the mailing of a letter on October 6 to 26,000 companies requesting their participation.
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CFPB Publishes Proposals to Implement Small Business Lending Data Collection Rulemaking
In connection with the requirements set forth in Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Section 1071), the Consumer Financial Protection Bureau (CFPB) released on September 15, both a high-level summary (Summary) and a more detailed outline of the proposals it is considering (Outline) to implement Section 1071’s mandate that the CFPB require financial institutions to “compile, maintain, and submit to the [CFPB] certain data on applications for credit for women-owned, minority-owned, and small businesses.”
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California, Illinois and New York File Suit Against OCC’s “Valid When Made” Final Rule
On July 29, the Attorneys General for the States of California, Illinois and New York (State AGs) filed suit seeking declaratory and injunctive relief in the US District Court for the Northern District of California (Complaint) against the Office of the Comptroller of the Currency (OCC), the primary federal regulator for national banks and federal savings banks (each, a Bank), in connection with the OCC’s issuance of its final “valid when made” rule that was effective on August 3 (VWM Rule).
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OCC Publishes Proposed Rule Regarding “True Lender”
On July 20, the Office of the Comptroller of the Currency (OCC), the primary federal regulator for national banks and federal savings banks (each, a Bank), issued a proposed rule regarding when a Bank is the “true lender” in connection with a loan (Proposed Rule).
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FDIC Publishes Final Rule Regarding the “Valid When Made” Doctrine
On June 25, the Federal Deposit Insurance Corporation (FIDC) published its final rule with respect to whether a loan made by a state-chartered bank is “valid when made” pursuant to the preemptive authority in Section 27 of the Federal Deposit Insurance Act (Final Rule).
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OCC Promulgates Final Rule on “Valid When Made”
On June 2, the Office of the Comptroller of the Currency (OCC) promulgated its final rule confirming the longstanding banking principle that a loan that is valid when made is enforceable by any subsequent assignee (the Final Rule). The Final Rule applies to national banks and federal savings banks.
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OCC and FDIC Release Proposed Revisions to Community Reinvestment Act
On January 9, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) (together known as the Banking Agencies) published proposed rules in the Federal Register that are designed to make the regulatory framework related to the Community Reinvestment Act (CRA) more “objective, transparent, consistent, and easy to understand” (Proposal). The last major revisions to the CRA were made in 1995.
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