MONTH-IN-BRIEF (Jun 2021)
U.S. House of Representatives Votes to Override OCC True Lender Rule
By Arthur J. Rotatori, Robert W. Savoie, and Sarah Edwards, McGlinchey Stafford, PLLC
The U.S. House of Representatives on June 24th voted 218 to 208 to repeal the Office of the Comptroller of the Currency’s (OCC) “True Lender” rule under the Congressional Review Act (CRA). The OCC published the rule last year to eliminate challenges regarding when a loan is actually made by a federally-chartered bank, instead of a non-bank partner that takes assignment of the loan shortly after origination. The True Lender rule adopted a simple bright-line test that said that if the national bank was the named lender in the loan documentation, the national bank was the true lender notwithstanding any other factor, such as whether the bank held the predominant economic interest in the loan. As the Senate adopted its own CRA resolution to overturn the rule on May 11th, the measure now goes to the White House, where President Joe Biden is expected to sign it.