What's the fate of bank-nonbank partnerships after 'true lender' vote?

What's the fate of bank-nonbank partnerships after 'true lender' vote?

May 12, 2021, American Banker

Karen Solomon spoke with American Banker about the Senate’s rejection of the OCC’s “true lender” rule and its impact on tech savvy nonbanks. Karen says, “I think it means continued uncertainty that will resonate particularly for bank partnerships with fintech companies.” She adds, “The agency is going to have to figure out whether there's any room for guidance or regulation in this area if Congress does pass the resolution of disapproval, and I’m not sure that there is.”

Speaking about the still standing  “valid-when-made” rules, she says, “The valid-when-made rules — both the OCC’s and the FDIC’s — make it clear that if the loan in question was valid at the time of origination, then the originator can transfer that loan subject to essentially the same interest rate terms. But the problem is, if you don't know who the lender actually was, then you've introduced uncertainty into the transaction on a square before the originator transfers.” She adds, “In other words, if the originator isn't clearly the true lender, then you have some uncertainty about what the purchaser of that loan is getting, even with valid-when-made regulations in place.”