The American Bankers Association today reiterated its opposition to a Congressional Review Act resolution that would repeal the OCC’s “true lender rule.” The rule that established a test to determine when a bank is considered the “true lender” of a loan made in a partnership with a nonbank entity. In a letter today, ABA told congressional leaders that while changes should be made to the rule, but the next comptroller of the currency could be denied the opportunity to modify the rule if it is invalidated through the Congressional Review Act resolution.
Under the Congressional Review Act, Congress may overturn with a simple majority vote rules finalized within the previous 60 days Congress is in session. A resolution using this procedure also prohibits the agency in question from reissuing a substantially similar rule.
ABA emphasized that the next comptroller of the currency should analyze the rule and “consider whether a new rulemaking to create a more robust true lender framework for providing safe and affordable credit is needed.”
Last week, ABA and a group of financial trade associations opposed the repeal of the rule in a joint letter, saying that repealing the rule “would reduce access to affordable credit, harming consumers and the communities in which they live.”