CFPB, Federal Agencies, State Agencies, and Attorneys General
The two lawsuits filed in federal district court in California by state attorneys general challenging the OCC and FDIC “Madden fix” final rules will both be heard by Judge Jeffrey S. White. Judge White was appointed to the federal bench in 2002 by President George W. Bush.
When the lawsuits were filed, the lawsuit…
On September 3, 2020, the California Department of Business Oversight (DBO) announced that it has launched a formal investigation into whether Wheels Financial Group, LLC d/b/a LoanMart, formerly one of California’s largest state-licensed auto title lenders, “is evading California’s newly-enacted interest rate caps through its recent partnership with an out-of-state bank.” Coupled with the California…
Three weeks after California, Illinois and New York sued the Office of the Comptroller of the Currency (OCC) to enjoin its final rule purporting to override the Second Circuit’s Madden decision as to national banks and federal savings associations, in a complaint filed on August 20, 2020 in the same California federal district court, California,…
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…
A recently-released Federal Reserve Board article, “The Cost Structure of Consumer Finance Companies and Its Implications for Interest Rates: Evidence from the Federal Reserve Board’s 2015 Survey of Finance Companies,” provides strong support for industry’s position that interest rate caps can be harmful to consumers by limiting the availability of small dollar loans.
The…
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…
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…
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 …
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…
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…
