‘True lender’ proposal not in consumer interest, should be withdrawn
The Office of the Comptroller of the Currency’s (OCC) “true lender” proposal could be exploited to promote “rent-a-charter” arrangements, CUNA wrote to House leadership Wednesday. The House will vote on a resolution of disapproval for the proposal, which would nullify it under the Congressional Review Act.
The Senate approved its resolution in May, and with House approval the resolution will take effect once signed by President Joe Biden.
A national bank would be considered the true lender of the loan if, as of the date of origination, it is named as the lender in the loan agreement or funds the loan, under the proposal.
“We believe the OCC’s final rule is not in the best interest of consumers and should be withdrawn. Instead, the OCC, in coordination with its sister banking regulators, should focus its relief efforts on facilitating and promoting the fair and reasonable loan options that are offered by local-community based lenders like credit unions,” the letter reads. “CUNA has long held the position that similar products and services should be regulated similarly so that consumers protection runs with a product or service, not with the entity providing the products or service.”
CUNA also noted why it believes the Congressional Review Act is the correct course of action, as an OCC reversal could be subject to court challenges.