On October 27, 2020, the Office of the Comptroller of the Currency (OCC) issued its final rule setting the test for determining who the ‘true lender’ is in a loan transaction, including in the context of a lending partnership between a federally-chartered bank and a non-bank third party. The final rule adopts the two-pronged test
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OCC’s Attempt at Clarifying “True Lender” Principle Met with Mixed Results
Posted in OCC
On July 22, 2020, the Office of the Comptroller of Currency (“OCC”) proposed a new rule in the federal register, concerning when a bank or savings association is a “true lender,” when the loan is sold or assigned to different entities. The comment period for the OCC’s proposed rule ended on September 3, 2020, with…
Mobile Banking Startup Varo Money Becomes First Fintech Company Granted a National Bank Charter
By Alexander Gershen & Carolee Anne Hoover on
On July 31, 2020, Varo Money Inc. announced that it was granted a national bank charter by the U.S. Office of the Comptroller of the Currency (OCC). The charter will allow Varo, a mobile banking fintech, to launch a national bank and offer a range of financial services and products that are backed by the…
New York, California and Illinois – the First to Challenge to the OCC’s Valid-When-Made Rule
Posted in OCC
It did not take long for the Office of the Comptroller of the Currency’s (“OCC”) May 29 Final Rule codifying the valid-when-made principal to face challenges in court. On July 29, the attorneys general for New York, California and Illinois filed suit in the Northern District of California to block the rule, which extended…
New York Files Brief in Support of Dismantling OCC’s Fintech Charter
On July 23, 2020, the New York Department of Financial Services (“DFS”) filed its appellate brief asking the Second Circuit Court of Appeals to uphold the lower court’s decision to block the Office of Comptroller of the Currency’s (“OCC”)’s special purpose national bank charter (“fintech charter”).
The DFS initially challenged the OCC’s fintech charter in…
OCC Clarifies the “Valid When Made” Principle
On May 29, 2020, the Office of the Comptroller of the Currency (OCC) issued a long-awaited final rule to clarify and underscore the ‘valid when made’ principle in which the interest rates permissible before a bank transfers a loan continues to be permissible after the transfer to a non-bank.
Generally, under the National Bank Act…
OCC Urges Second Circuit to Reverse Fintech Charter Decision
By Neelam Takhar, Salwa S. Kamal & Alexander Gershen on
Update: On July 23, 2020, the New York Department of Financial Services (“DFS”) filed its appellate brief asking the Second Circuit Court of Appeals to uphold the lower court’s decision to block the Office of Comptroller of the Currency’s (“OCC”)’s special purpose national bank charter (“fintech charter”). Please see our July 28 post for more…
Supreme Court to Consider the CFPB’s Constitutionality: Key Takeaways
On Friday, the U.S. Supreme Court agreed to consider the constitutionality of the Dodd-Frank Act law that prohibits the President from removing a CFPB Director except for “inefficiency, neglect of duty, or malfeasance” — the so-called “for cause” restriction (see 12 U.S.C. §5491(c)(c)). The Court’s decision to address this restriction, which the CFPB…
New York’s Lawsuit Contesting the OCC’s Fintech Charter Survives First Legal Hurdle
By Alexander Gershen on
On May 2, 2019, the U.S. District Court for the Southern District of New York denied the Office of the Comptroller of the Currency’s (OCC) motion to dismiss a complaint brought against it by the Maria T. Vullo, superintendent of the New York State Department of Financial Services (DFS). The complaint had challenged the OCC’s…