Opportunity Financial, LLC (OppFi) has filed a Complaint for Declaratory and Injunctive Relief in a California state court against the California Department of Financial Protection and Innovation (DFPI), seeking to block the DFPI from applying California usury law to loans made through OppFi’s partnership with Fin Wise Bank (Bank), a state-chartered FDIC-insured bank located in Utah.… Continue Reading

The OCC’s true lender rule was intended to create a bright line test for when a national bank or federal savings association should be considered the “true lender” in the context of third party partnerships but Congress overturned the rule.  After reviewing the relevant background, we examine the Congressional override’s implications for future federal true lender rulemaking and its impact on existing law, key federal and state court challenges and decisions, state legislative and administrative developments, and risk mitigants for bank/nonbank partnerships, including potential loan program structures.… Continue Reading

This past Tuesday, Acting Comptroller of the Currency Michael Hsu appeared as a witness at the Senate Banking Committee’s hearing, “Oversight of Regulators: Does our Financial System Work for Everyone?

In his written and oral testimony, Mr. Hsu stressed as an overall theme the need for the OCC to prohibit “predatory and discriminatory practices while promoting financial inclusion.”  … Continue Reading

The final step in the demise of the OCC’s true lender rule occurred yesterday with President Biden signing the resolution under the Congressional Review Act (CRA) overturning the rule that was passed by the House and Senate.

On August 9, 2021, from 12:00 p.m. to 1:00 p.m. ET, Ballard Spahr will hold a webinar, “Congress Overrides the OCC’s True Lender Rule: What Are the Risks for Banks and Their Loan Program Nonbank Partners?” … Continue Reading

Last week, by a vote of 218-208, the House of Representatives passed the resolution introduced by Democratic Senators under the Congressional Review Act (CRA) to overturn the OCC’s “true lender” final rule.  The rule addresses when a national bank or federal savings association should be considered the “true lender” in the context of a partnership with a third party. … Continue Reading

Yesterday, by a vote of 52-47, the Senate passed the resolution introduced by Democratic Senators under the Congressional Review Act (CRA) to overturn the OCC’s “true lender” final rule.  The rule addresses when a national bank or federal savings association should be considered the “true lender” in the context of a partnership with a third party. … Continue Reading

As discussed in our earlier blog, the Senate Banking, Housing and Urban Affairs Committee held a hearing on April 28, 2021 entitled “The Reemergence of Rent-a-Bank?”.

The hearing focused primarily on the final “True Lender” rule issued by the OCC on October 27, 2020, which was effective December 29, 2020.… Continue Reading

On Wednesday, April 28, the Senate Banking Committee will hold a hearing, “The Reemergence of Rent-a-Bank?

In addition to Brian Brooks, the former Acting Comptroller of the Currency, the scheduled witnesses are Josh Stein, North Carolina Attorney General, Lisa Stifler, Director of State Policy, Center for Responsible Lending, Dr.… Continue Reading

After looking at CSBS’s role in the system of state financial supervision, we discuss CSBS initiatives to coordinate state licensing and supervision of multi-state non-bank companies, such as by implementing a “one company-one exam” approach and multi-state licensing program, its work on a model law for money services businesses, why CSBS opposes an OCC fintech charter for non-depository companies, and its position on the OCC/FDIC “Madden-fix” rules and OCC “true lender” rule.… Continue Reading

On April 15, 2021, the House Financial Services Committee’s Subcommittee on Consumer Protection and Financial Institutions will hold a hearing titled, “Banking Innovation or Regulatory Evasion? Exploring Trends in Financial Institution Charters.”  A topic expected to receive attention at the hearing is the OCC’s decision to accept applications for special purpose national bank charters from non-depository fintechs. … Continue Reading