Capping off months of proposed rules and settlements addressing
marketplace lending issues, on October 27, 2020, the Office of the
Comptroller of the Currency (OCC) finalized a rule specifying that a national
bank or federal savings association (collectively,
"banks") will be considered the "true lender"
of a loan originated in connection with a lending partnership
between the bank and a non-bank service provider if, as of the date
the loan is originated, the bank is named as the lender in the loan
agreement or funds the loan. Despite opposition from consumer
advocate groups and state attorneys general, the OCC retained its
"simple, bright-line test" to provide legal certainty the
OCC said is "necessary for banks to partner confidently with
other market participants and meet the credit needs of their
customers." Legal challenges are sure to follow.
