OCC Defines ‘True Lender’ Rule for National Banks

The Office of the Comptroller of the Currency issued its "true Lender" rule on Tuesday. The rule aims to define the partnership between a bank and non-financial institutions. A national bank must meet lending criteria to be considered as the true lender, the OCC said. 

According to the true lender rule, a national bank will be considered the true lender under two conditions"

If the bank funds the loan

Or has its name on the loan agreement as to the lender

The rule defines a bank’s responsibilities towards ensuring that a loan follows the required consumer protection laws. It also says that state interest rate caps don’t apply to the origination.  

If on the date of the origination one bank funds the loan while another bank is named on the loan agreement, the latter will b...

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