SFA Submits Amicus Brief in Valid-When-Made Litigation
SFA has been a leading industry advocate for the valid-when-made doctrine – a bedrock policy issue for our market. Our efforts supported the OCC and FDIC proceeding with rulemakings to reinforce this doctrine, a foundational one for both bank lending and the structured products market. In June 2020, three states attorneys general – California, Illinois and New York – filed suit in U.S. District Court against the OCC and its final rule, Permissible Interest on Loans that are Sold, Assigned or Otherwise Transferred. Plaintiffs’ claim that “valid-when-made” is not a longstanding doctrine under the National Bank Act and supported by caselaw, and that the OCC had no authority to engage in the rulemaking. SFA jointly filed with a coalition of other associations – the Bank Policy Institute (BPI), the American Bankers Association (ABA), the Consumer Bankers Association (CBA) and the Chamber of Commerce of the United States of America – a brief as amici curiae in support of the OCC valid-when-made rule. Our brief provided the court with the perspective of our members and market participants on the importance of the doctrine for lending markets, impact on the availability of credit to consumers and businesses, and bank safety and soundness.
The hearing date for the court to consider the parties’ motions for summary judgement is March 19, 2021. SFA will monitor the case and provide updates to membership as it develops.