On June 1, 2022, plaintiff Kristen Michael filed a class action lawsuit against FinTech lender Opportunity Financial, LLC (“OppFi”) on behalf of herself and a putative class alleging, inter alia, that OppFi loans money at an interest rate upwards of 130% higher than allowed by state law. Ms. Michael alleges that OppFi offers “OppLoans” in over 30 states, whereby it originates, underwrites, services and enforces these loans, even claiming the loans on its financial reports. … Continue Reading
true lender
OppFi files complaint to block “true lender” challenge by California Department of Financial Protection and Innovation
By Ronald K. Vaske, Glen P. Trudel & Mindy Harris on
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
This week’s podcast: Congress overrides the OCC’s true lender rule: what are the risks for banks and their loan program nonbank partners?
By Barbara S. Mishkin on
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
Acting Comptroller of the Currency Hsu testifies about OCC activity on overdrafts, CRA, bank partnerships, alternative data
By Ronald K. Vaske on
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
President Biden signs CRA resolution overriding OCC true lender rule; Ballard Spahr to hold August 9 webinar
By Ballard CFS Group on
Posted in OCC, Regulatory and Enforcement
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
House passes CRA resolution to override OCC true lender rule
By Ballard CFS Group on
Posted in OCC, Remittance Transfers
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
Senate passes CRA resolution to override OCC true lender rule
By Glen P. Trudel, Ronald K. Vaske & Ballard CFS Group on
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
Fans and Foes of OCC True Lender Rule Spar at Senate Committee “Rent-a-Bank” Hearing
By Mindy Harris on
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
Senate Banking Committee to hold April 28 hearing on “rent-a-bank,” Acting Comptroller of the Currency and State AGs send letters to lawmakers on OCC “true lender” rule
By Mindy Harris on
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
This week’s podcast: A discussion of the initiatives and positions of the Conference of State Bank Supervisors, with special guest Margaret Liu, CSBS Senior Vice President and Deputy General Counsel
By Barbara S. Mishkin on
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