On Tuesday, October 27, the Office of the Comptroller of the Currency (OCC) issued its final rule that determines when a national bank or federal savings association makes a loan and is the ‘true lender,’ including in the context of a partnership between a bank and a third party. As laid out in the OCC’s press release, the rule specifies that a bank makes a loan and is the true lender if, as of the date of origination, it (1) is named as the lender in the loan agreement or (2) funds the loan. Further, the rule also specifies that if, as of the date of origination, one bank is named as the lender in the loan agreement and another bank funds that loan, the bank that is named as the lender in the loan agreement makes the loan. The rule is effective sixty days after publication in the Federal Register.
SFA provided comments to the OCC on the proposed rulemaking, and a few key clarifications have been made in the final rule that address SFA member concerns.
SFA is highly supportive of the OCC’s efforts to provide regulatory clarity and certainty to lenders and secondary market participants. This rule will enable banks to originate and sell loans to third-party or affiliated non-bank purchasers in a manner consistent with their business objectives and risk appetite and in compliance with applicable laws and regulations.
Please contact SFA Team, if you have any questions.