True lender rule killed in Congress

True lender rule killed in Congress

June 28, 2021, Global Banking Regulation Review

Karen Solomon is quoted in Global Banking Regulation Review regarding Congress’s vote to rescind the “true lender” rule regulating bank-tech partnerships, a leftover of the Office of the Comptroller of the Currency’s Trump-era policies. Karen says it is not clear how the OCC will respond, whether by allowing litigation or federal legislation to resolve the issue over time, or by issuing a new rule. She adds the latter may open the OCC up to litigation.

“The CRA itself prohibits judicial review for any action take ‘under’ the CRA,” she explains. “OCC could perhaps argue that a revised ‘true lender’ rule is not issued ‘under’ the CRA, but ‘under’ a different statute, for instance the National Bank Act. Such an assertion potentially could be challenged in court, and that litigation could clarify the meaning of the anti-judicial review provision in the CRA.”