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On July 12, 2021, the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) proposed interagency guidance on how banks should manage third-party relationships, including partnerships with fintech companies. The proposal would offer a framework for banks when developing risk management practices for their third-party relationships, taking into account the level of risk, complexity, size of the organization, and the nature of the third-party relationship.
Continue Reading Bank Regulators Propose Interagency Guidance on Fintech Partnerships

After years of litigation, the Office of Comptroller of the Currency’s (“OCC”) special purpose national bank charter (“fintech charter”) survives to see another day.  On June 3, 2021, the Second Circuit reversed the district court’s decision denying the OCC’s motion to dismiss, delivering a blow to the New York Department of Financial Services (“DFS”) and paving the way for the OCC to again accept applications for its fintech charter.
Continue Reading OCC’s Fintech Charter Survives After Reversal in the Second Circuit

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 set forth in the OCC’s proposed ‘true lender’ rule issued in July of this year – a bank is the ‘true lender’ if, as of the date of origination, the bank (1) is “named as the lender in the loan agreement,” or (2) “funds the loan.”  The rule further clarified that if one bank funds the loan but another bank is named as the lender in the loan agreement, the bank identified in the loan agreement will be considered the ‘true lender’ of the loan. That clarification is consistent with the fundamental rule of the Truth-in-Lending Act, which always makes the party on the loan agreement the “creditor” on that loan.
Continue Reading OCC Issues Final ‘True Lender’ Rule To Provide Clarity For Bank Lending Partnerships

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 mixed results.
Continue Reading OCC’s Attempt at Clarifying “True Lender” Principle Met with Mixed Results

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 Federal Deposit Insurance Corp (FDIC).

The announcement marks a historic moment for fintech companies, as Varo will become the first fintech company to obtain a national bank charter with the OCC.Continue Reading Mobile Banking Startup Varo Money Becomes First Fintech Company Granted a National Bank 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…

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…

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…

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…