In a recent blog post, Alan Kaplinsky and Scott Pearson wrote about the remarks made by CFPB Director Richard Cordray and Comptroller of the Currency Thomas Curry at the LendIt USA conference in New York City earlier this month. In the blog post, we expressed our strong disagreement with Comptroller Curry’s refusal to author an interpretive opinion to address the disruption in the lending markets caused by the Second Circuit’s Madden decision and promised to share our reasons at a later date for why we think that the OCC should go even further and propose a rule to address Madden.
Alan has now written an article published in BankThink, American Banker’s “platform for informed opinion about the ideas, trends and events reshaping financial services,” that urges the OCC to issue a rule to address Madden. In Madden, the Second Circuit ruled that a company that purchases loans from a national bank could not charge the same rate of interest on the loan that Section 85 of the National Bank Act allows the national bank to charge. As Alan demonstrates in his article, there is clear OCC and U.S. Supreme Court precedent for the OCC to issue an interpretive opinion or regulation interpreting Section 85 to address an issue that is being litigated and the Supreme Court has indicated that it can properly do so. As he also demonstrates, the need for an OCC rule is not eliminated by the OCC’s proposal to create a national bank charter for financial technology companies.