In an order issued August 12, 2020, the United States District Court for the District of Colorado relied on the OCC’s “Madden fix” rule to hold that, under Section 27 of the Federal Deposit Insurance Act, 12 U.S.C. § 1831d, a promissory note with an interest rate that was valid when made remains valid
madden
Three-state attack on the OCC’s “Madden fix” rule
By Jeremy T. Rosenblum & James Kim on
As previously reported, the OCC recently adopted a final rule (the “Madden fix”) designed to resolve the legal uncertainty created by the Second Circuit’s decision in Madden v. Midland Funding, which held that a non-bank that purchased charged-off loans from a national bank could not charge the same rate of interest on…
This week’s podcast: The OCC and FDIC “Madden fix” final rules and related recent developments
By Barbara S. Mishkin on
After reviewing the legal foundation for federal preemption of state law limits on interest, we discuss the final OCC/FDIC “Madden fix” rules, the “true lender” issue, potential Congressional or litigation challenges to OCC/FDIC “Madden fix” and “true lender” rules, and recent developments in litigation involving Madden or “true lender” challenges to bank/nonbank partnerships…
OCC issues proposed “true lender” rule
Less than two months after issuing its final “Madden fix” rule, the OCC has now issued a proposed rule to address when a national bank or federal savings association should be considered the “true lender” in the context of a third party relationship. Comments on the proposal, which was published in today’s Federal …
Update on recent non-COVID-19-related consumer financial services legal developments
By Barbara S. Mishkin on
Posted in CFPB Exams, Debt Collection NPRM, Fair Lending, FDIC, FTC, OCC, Payday Lending, Regulatory and Enforcement, Usury
The topics we discuss are: implications of the SCOTUS Seila Law decision on CFPB rules, past consent orders, ongoing enforcement, and the Texas lawsuit challenging the CFPB payday loan rule; DOJ/FTC auto dealer fair lending actions, status of disparate impact, and Google targeted advertising changes; the CFPB’s new advisory opinion program; timing of CFPB debt…
FDIC issues “Madden fix” rule addressing state bank loan interest rates after assignment
By Glen P. Trudel & James Kim on
The FDIC has issued its widely anticipated final rule resolving the uncertainty caused by the Second Circuit’s Madden v. Midland Funding decision. Madden held that a non-bank entity that purchased charged-off loans from a national bank could not charge the same rate of interest on the loans as the national bank was able to charge…
OCC to propose “true lender” rule
By Alan S. Kaplinsky on
Posted in OCC, Regulatory and Enforcement
In remarks made during a recent online event held by the Online Lending Policy Institute, Acting Comptroller of the Currency Brian Brooks indicated that the OCC will soon be issuing a “true lender” proposed rule to supplement its recently-released final rule intended to remove the legal uncertainty created by the Second Circuit’s Madden decision.
While…
Colorado state court rules federal interest rate preemption for state bank loans does not extend to non-bank assignees; Ballard Spahr to hold June 19 webinar
By Jeremy T. Rosenblum on
Posted in Regulatory and Enforcement, Usury
A Colorado state district court has ruled that a non-bank assignee of loans made by a state bank cannot charge the same interest rate that the state bank assignor can charge under Section 27(a) of the Federal Deposit Insurance Act (12 U.S.C. § 1831d(a)).
The ruling in Martha Fulford, Administrator, Uniform Consumer Credit Code v. …
OCC adopts final rule to resolve uncertainty created by Madden
By Jeremy T. Rosenblum on
On Brian Brooks’ first day as Acting Comptroller of the Currency, the OCC issued a final rule intended to resolve the legal uncertainty created by the Second Circuit’s decision in Madden v. Midland Funding. In that decision, the Second Circuit held that a nonbank that purchased charged-off loans from a national bank could not…
House Financial Services Committee: “rent-a-bank” hearing on Feb. 5; Director Kraninger to testify on Feb. 6
By Barbara S. Mishkin on
Posted in CFPB, Regulatory and Enforcement
On Wednesday, February 5, the House Financial Services Committee will hold the first part of a two-part hearing on “rent-a-bank” structures. The hearing is titled “Rent-A-Bank Schemes and New Debt Traps: Assessing Efforts to Evade State Consumer Protections and Interest Rate Caps.” (Part Two is scheduled for February 26.)
The Committee Memorandum for Part…