This week, the Office of the Comptroller of the Currency (OCC) finalized the “true lender” rule. At issue is partnerships between third-party nonbanks and federal savings associations or national banks which have led to loans being underwritten at interest rates exceeding other states’ rate caps. Consumer groups have been critical of these partnerships, citing that such agreements undermine consumer protections and that lenders are predatorily using banks to evade usury laws. Previously, the OCC clarified that interest rates on loans are valid even if sold to nonbanks and the rate exceeds other states’ rate caps, known as the “Madden Fix.”
The final rule clarifies that banks are considered the “true lender” if on the date of origination, they are listed as the lender in the loan agreement or if they provide funding for the loan. If on the day of origination, one bank is listed as the lender and another bank funds the loan, then the bank that is listed as the lender is the “true lender.” Additionally, the rule addresses “Rent-a-Charter” arrangements by clarifying that true lenders of loans are responsible for all the compliance obligations of the underwritten loan.
AFSA is pleased that the OCC fully adopted AFSA’s comments it previously made to the agency. In the letter, AFSA asked that the OCC clarify that “funding a loan under the Proposed Rule excludes banks purchasing retail installment contracts (RICs) from automobile dealerships or otherwise clarify that the Proposed Rule will not affect well-established practices in the indirect vehicle finance market.” In addition, AFSA emphasized the importance of defining when a bank “funds a loan.”
This week, the Office of the Comptroller of the Currency (OCC) finalized the “true lender” rule. At issue is partnerships between third-party nonbanks and federal savings associations or national banks which have led to loans being underwritten… Read the rest
The featured Business Partner for November is GOLDPoint Systems, which offers one of the most complete Loan Management Software Systems in the Direct and Indirect market, covering the complete loan life cycle. We asked them a few questions… Read the rest
For the first time in the Fair Debt Collection Practices Act’s (FDCPA) 40-plus-year history, a regulatory agency has issued rules under the statute.
The new rulemaking, issued by the Consumer Financial Protection Bureau (CFPB), … Read the rest
AFSA’s State Government Affairs (SGA) team recently sent a letter to the California Department of Business Oversight (DBO)—now renamed the Department of Financial Protection and Innovation—to provide comments on the department’s recently… Read the rest
AFSA’s State Government Affairs (SGA) team recently published model legislation that would permanently authorize employees of licensed entities to work from home without the need of a branch license. Since the start of the COVID-19 pandemic,… Read the rest
Join us on TODAY at 2:00 p.m. ET for Navigating the Road to Recovery: Proven Delinquency Risk Management Tools, presented by SWBC.
For auto finance companies, delinquency is a common challenge. Experts anticipate delinquency levels could… Read the rest
This week, the American Financial Services Association (AFSA) commented on the Consumer Financial Protection Bureau’s (CFPB) request for information (RFI) on the economic impact of the Credit Card Accountability and Disclosure (CARD)… Read the rest
The 2020 AFSA Annual Meeting & Independents Conference & Expo was packed with information and informative sessions. Did your kid run in during Cal Ripken’s session? Maybe the delivery guy showed up. Or maybe you just got sidetracked… Read the rest
The American Financial Services Association’s Women’s Leadership Council (WLC) kicked off its Fall meeting with Rochelle McClanahan, Chair, and Chief Financial Officer & Compliance Officer of Brundage Management / Sun Loan. Rochelle… Read the rest
AFSA is pleased to announce that the Women’s Forum communities page is now live and ready for you to join! The Women’s Forum is a place to interact, network, and share best practices with other women in the consumer credit industry. All… Read the rest
