OCC Adopts Rule to Determine "True Lender" of Loan

The OCC adopted a rule that makes explicit the circumstances in which a national bank or federal savings association is considered to be the "true lender" in the "context of a partnership between a bank and a third party, such as a marketplace lender."

As previously covered, the purpose of the rule is to reduce legal ambiguity as to the identity of a lender on a given loan. The rule states that a national bank or federal savings association is considered to have made a loan if, on the date that the loan originated, the national bank or federal savings association (i) is named as the lender in the loan agreement or (ii) funds the loan.

The final rule is identical to its proposed version with the exception of an additional clarification, which provides that, in the circumstance that the bank named as the lender in a loan agreement is different from the bank funding the loan, the bank identified in the loan agreement as the lender is the "true lender."

The final rule will go into effect 60 days after its publication in the Federal Register.