OCC Proposes Rule To Settle 'True Lender' Question

Law360 (July 20, 2020, 10:58 PM EDT) -- The Office of the Comptroller of the Currency proposed a rule Monday to clarify that a bank is the "true lender" of a loan if that institution is named on the loan document at the date of origination or if it funds the loan, as the agency seeks to address ambiguity amid the proliferation of bank partnerships in lending.

In the proposed rule, the OCC aims to address the "increasing uncertainty" in the legal framework that governs lending partnerships between banks or federal savings associations and third parties.

The notice of proposed rulemaking explains that while banks are authorized under federal...

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