On January 21, 2020, twenty-two State Attorneys General and the
Hawaii Office of Consumer Protection submitted a comment letter to the Office of the Comptroller of the
Currency (OCC) in opposition to its proposed rulemaking to resolve
the “confusion” stemming from the Second
Circuit’s 2015 decision in Madden v. Midland Funding
LLC.1 As detailed in
our prior client alert, in November 2019, the OCC proposed to clarify that when a bank sells,
assigns, or otherwise transfers a loan (including to a non-bank
entity), the interest rate applicable to the loan prior to the
transfer would continue to apply following the transfer. The
OCC largely relies on the common law “valid when made”
principle as a basis for its rulemaking. Under the
“valid when made” doctrine, loan terms that are valid
when a loan is made remain valid loan terms until the loan is
satisfied or forgiven, irrespective of whether, or to whom, the
loan is sold. A non-usurious loan, therefore, does not
