Last week, by a vote of 218-208, the House of Representatives passed the resolution introduced by Democratic Senators under the Congressional Review Act (CRA) to overturn the OCC's "true lender" final rule. The rule addresses when a national bank or federal savings association should be considered the "true lender" in the context of a partnership with a third party. Last month, by a vote of 52-47, the resolution was passed by the Senate. President Biden is expected to sign the resolution.
Pursuant to the CRA, the enactment of a disapproval measure would preclude the OCC from subsequently reissuing the rule or adopting a new rule that is substantially the same as the disapproved rule unless "the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule."
Following the House vote, Acting Comptroller of the Currency Michael Hsu issued a statement in which he reaffirmed "the agency's long-standing position that predatory lending has no place in the federal banking system" and indicated that "[m]oving forward, the OCC will consider policy options, consistent with the Congressional Review Act, that protect consumers while expanding financial inclusion."
The Congressional override of the rule will render moot the lawsuit filed by a group of state attorneys general in January 2021 seeking to set aside the rule.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
