Ballard Spahr LLP has submitted a comment letter to the OCC in support of its proposed rule, “National Banks and Federal Savings Associations as Lenders” (the “Proposed Rule”). As detailed in our letter, we applaud the Proposed Rule, which would establish a clear and logical bright line confirming and clarifying that a bank (or
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Colorado Settlement Provides a Possible Path Forward for Certain Bank-Fintech Online Lending Partnerships
We have previously blogged about the lawsuits filed by the Colorado Attorney General against fintechs Avant and Marlette Funding and their partner banks WebBank and Cross River Bank. These lawsuits challenged on Madden and “true lender” grounds the interest rates charged under the defendants’ loan programs. The AG has now settled with the defendants and…
Federal court rejects Madden and finds loan valid when made per OCC final rule, but remands case to allow discovery on true lender question
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…
Three-state attack on the OCC’s “Madden fix” rule
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
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
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
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
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
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. …