Pepper Hamilton partner Gregory J. Nowak hosted another virtual Investment Management and Private Funds Roundtable. Mr. Nowak was joined by Mark Dabertin, special counsel at Pepper Hamilton, to discuss the crossroads of alt...more
The OCC’s new rule titled “Permissible Interest on Loans That Are Sold, Assigned, or Otherwise Transferred” (the Permissible Interest Rule) states that a national bank “may transfer a loan without impacting the permissibility...more
One of the most interesting financial innovations pre-COVID-19 was the creation of the merchant cash advance transaction, or MCAT. While the MCA industry has grown significantly, MCAT originators have faced a significant...more
On May 20, the OCC, the FDIC, the Federal Reserve Board and the National Credit Union Administration issued “Interagency Lending Principles for Offering Responsible Small-Dollar Loans.” ...more
On May 14, The Wall Street Journal ran a front-page article titled “Strapped Borrowers Inundate Lenders,” which discussed the efforts of banks to provide relief to consumer borrowers during the COVID-19 crisis. The article...more
On May 8, the Office of the Inspector General (OIG) of the Small Business Administration (SBA) issued a report summarizing its review of the SBA’s implementation of the Paycheck Protection Program (PPP). ...more
Earlier last week, the Consumer Financial Protection Bureau issued an interpretive rule intended to “make it easier for consumers with urgent financial needs to obtain access to mortgage credit more quickly in the middle of...more
In two recent joint statements, the federal banking agencies have encouraged banks to make short-term loans to consumers and small businesses impacted by the COVID-19 crisis....more
A proposed rule published by the FDIC on March 31 would create a formal framework for the agency’s supervision and oversight of nonfinancial commercial entities that control an industrial bank. ...more
A number of our clients have posed questions regarding how to treat loan applications received pursuant to the Paycheck Protection Program (PPP) for purposes of the Equal Credit Opportunity Act (ECOA). This has become a...more
New third-party oversight guidance issued by the OCC should spur increased financial innovation at national banks. On March 5, the OCC issued OCC Bulletin 2020-10, Frequently Asked Questions to Supplement OCC Bulletin...more
3/20/2020
/ Banking Sector ,
Banks ,
FDIC ,
Financial Institutions ,
FinTech ,
New Guidance ,
Non-Bank Lenders ,
OCC ,
Risk Management ,
Third-Party ,
Third-Party Risk
Bank examinations, holding company inspections and other “supervisory events” can be a source of anxiety and dread for those who work in the banking industry.
Originally published in ABA Bank Compliance - March/April 2020....more
On May 23, the FTC launched an investigation into unfair or deceptive practices in the small business financing industry. Press reports of this investigation emphasized the investigation’s relevance for online lenders and...more
11/4/2019
/ Federal Trade Commission (FTC) ,
Financial Transactions ,
Financing ,
FTC Act ,
Investigations ,
Section 5 ,
Small Business ,
Small Business Loans ,
Truth in Lending Act (TILA) ,
UDAP ,
Unfair or Deceptive Trade Practices ,
UTPCPL
On September 10, the FDIC and the OCC jointly submitted an amicus brief to the U.S. District Court for the District of Colorado in support of the appellee debt buyer in In re Rent-Rite Super Kegs West Ltd. ...more
9/19/2019
/ Amicus Briefs ,
Assignees ,
Banks ,
Commercial Bankruptcy ,
Commercial Loans ,
Debt Buyers ,
FDI Act ,
FDIC ,
Financial Services Industry ,
Interest Rates ,
Madden v Midland Funding ,
National Bank Act ,
OCC ,
Preemption ,
Valid When Made Doctrine
In preparing a merchant cash advance (MCA) agreement on behalf of the provider, there is constant tension between the urge to include every conceivable contractual right for protecting the provider’s economic interests and...more
On May 23, the FTC launched an investigation into potentially unfair or deceptive practices in the small business financing industry, including by merchant cash advance providers. Although the launch of the investigation was...more
6/7/2019
/ Consumer Financial Products ,
Federal Trade Commission (FTC) ,
Financing ,
FTC Act ,
Government Investigations ,
Magnuson-Moss Act ,
Popular ,
Section 5 ,
Small Business ,
UDAP ,
Unfair or Deceptive Trade Practices
A watershed moment is “the exact moment that changes the direction of an activity or situation . . . a dividing point, from which things will never be the same.” The Second Circuit Court of Appeals’ 2015 decision in Madden v....more
5/3/2019
/ Agency Relationship ,
Bank Service Company Act ,
Banks ,
Debt Buyers ,
Federal Bank Regulatory Agencies ,
Federal v State Law Application ,
Financial Sponsors ,
Interest Rates ,
Lending Programs ,
Loan Origination Funds ,
Loan Servicing ,
Madden v Midland Funding ,
Nonbank Firms ,
Participation Agreements ,
Usury ,
Valid When Made Doctrine
The need to control risks associated with using third-party technology service providers was reemphasized by the FDIC for institutions with less than $1 billion in assets in a new financial institutions letter...more
In October 2018 the FDIC became the latest federal financial regulator to announce plans to create an Office of Innovation, following on the heels of the OCC and the CFPB.
Originally published in Delaware Banker - Winter...more
Online lenders continue to be plagued by “true lender” lawsuits that challenge whether the named lender in loans made through a partnership between a nonbank lender and a regulated bank is actually an artifice in a...more
Online lenders continue to be plagued by “true lender” legal issues, including lawsuits from state attorneys general and private litigants challenging the named lender in loans made through online lenders’ partnerships with...more
Due to the high volume of relevant judicial decisions issued by New York courts over the past two years, the risk that enforceability of a merchant cash advance (MCA) contract might be successfully challenged as a disguised...more
As reported in American Banker, consumer advocacy groups are concerned that financial inclusion expectations for fintechs chartered as special-purpose national banks may not perfectly mirror the requirements of the Community...more
8/16/2018
/ Community Reinvestment Act ,
Consumer Financial Products ,
Consumer Lenders ,
Financial Institutions ,
Financial Services Industry ,
FinTech ,
Innovative Technology ,
Loans ,
Low-Income Issues ,
Non-Bank Lenders ,
Regulatory Oversight ,
Regulatory Standards ,
Special Purpose National Bank Charter ,
Subprime Mortgages
The Office of the Comptroller of the Currency announced on July 31 that it will begin accepting applications for special purpose national bank charters from nondepository financial technology companies (fintechs) that are...more
When differences emerge between the activities of state banks and national banks in the U.S. dual banking system, the root cause typically is a difference between state and federal law....more