The OCC proposed a rule to clarify when a national bank or federal savings association has made a loan and is considered to be the "true lender" in the "context of a partnership between a bank and a third party, such as a marketplace lender."
In issuing the rule proposal, the OCC stated that it intends to reduce any legal ambiguity concerning when a national bank or federal savings association (rather than some other party in the transaction) should be viewed as a lender on a given loan. Specifically, the rule would clarify that a national bank or federal savings association is considered to have made the loan if, on the date that the loan originated, the national bank or federal savings association (i) is named as the lender in the loan agreement or (ii) funds the loan.
Comments on the proposal must be submitted by September 3, 2020.
Commentary
While the OCC's rule is intended to provide clarity and reduce litigation risk, it may provide neither in the short run. State attorneys general, among other interested groups, are likely to challenge the rule. That litigation will take years to resolve. In the meantime, the courts will remain on the front lines, shaping the true lender doctrine on a case-by-case basis as cases involving the doctrine wind their way through trial and appellate courts.
Primary Sources
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