FDIC Seeks To Quash State AGs' Valid-When-Made Suit

Law360 (May 21, 2021, 9:44 PM EDT) -- The Federal Deposit Insurance Corp. has asked a California federal court to shut down a lawsuit alleging the agency overstepped with its so-called valid-when-made rule for state-chartered banks, arguing that the state attorneys general behind the litigation "fail to present a credible challenge."

The FDIC defended its rule in a summary judgment bid filed Thursday in the case, where Democratic attorneys general for California, New York and several other states have accused the agency of improper "arbitrary and capricious" rulemaking and want the court to roll back the regulation.

Finalized last year, the FDIC's rule allows loans made by a state-chartered...

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