It did not take long for the Office of the Comptroller of the Currency’s (“OCC”) May 29 Final Rule codifying the valid-when-made principal to face challenges in court. On July 29, the attorneys general for New York, California and Illinois filed suit in the Northern District of California to block the rule, which extended
Financial
New York Files Brief in Support of Dismantling OCC’s Fintech Charter
On July 23, 2020, the New York Department of Financial Services (“DFS”) filed its appellate brief asking the Second Circuit Court of Appeals to uphold the lower court’s decision to block the Office of Comptroller of the Currency’s (“OCC”)’s special purpose national bank charter (“fintech charter”).
The DFS initially challenged the OCC’s fintech charter in…
OCC Clarifies the “Valid When Made” Principle
On May 29, 2020, the Office of the Comptroller of the Currency (OCC) issued a long-awaited final rule to clarify and underscore the ‘valid when made’ principle in which the interest rates permissible before a bank transfers a loan continues to be permissible after the transfer to a non-bank.
Generally, under the National Bank Act…
Update: Funding Circle Approved To Issue Paycheck Protection Program Loan
With the help of McGuireWoods, Funding Circle, the leading online small business loan platform in the United States, joins fintech companies Intuit, PayPal, and Square, to participate in the U.S. Small Business Administration’s (SBA) Paycheck Protection Program (PPP), which was enacted as part of the CARES Act last month. To recap, the PPP provides aid…
Update – Fintech Lenders Approved to Participate in the Paycheck Protection Program
Fintech companies Intuit, PayPal and Square have officially been approved to participate in the U.S. Small Business Administration’s (SBA) $349 billion Paycheck Protection Program (PPP), which was enacted as part of the CARES Act last month. To recap, the PPP provides aid in the form of potentially forgivable loans to eligible small businesses, which loans…
The Role of Fintech Lenders in the Paycheck Protection Program
The latest regulations coupled with the Treasury Department guidance have left many scratching their heads as to whether fintech companies will be able to provide small business loans under the recently enacted Paycheck Protection Program (PPP), a crucial part of the U.S. legislature’s latest attempts to address the serious economic impacts of the COVID-19 pandemic. …
Square Obtains FDIC Charter To Operate Its Own Bank As An Industrial Loan Company
By Anthony Le & Molly M. White
On March 18, 2020, Square Inc., became the first U.S. fintech company to receive conditional approval of an Industrial Loan Company (“ILC”) charter from the Federal Deposit Insurance Corporation (“FDIC”), to pair with its prior charter approval on March 17, 2020 from the Utah Department of Financial Institutions. It became the first new de novo…
If the CFPB is Unconstitutional, Can Its Prior Actions be Unwound?
There are widespread expectations that the Supreme Court, following an oral argument last week, may rule that part of the law that created the CFPB is unconstitutional. As a result, many business executives, in particular, have been asking their lawyers about the likely impact of such a ruling. These questions have included ones like: Could…
Fintech Company Avoids Murky Regulatory Landscape by being the First U.S. Fintech Company to Acquire a Regulated Bank
For the first time, a U.S. fintech company is acquiring a regulated U.S. bank, which will give it access to a stable and cheaper source of funding – as well as a national bank charter.
On February 18th, LendingClub, one of the largest providers of personal loans in the U.S., announced that it will pay…
FINRA 2.0: FINRA Releases Its 2020 Risk Monitoring and Examination Priorities
FINRA’s examination program has undergone its most significant reorganization in decades. As stated in a press release, Oct. 1, 2018, FINRA’s goal for the reorganization was to “consolidate its Examination and Risk Monitoring Programs, integrating three separate programs into a single, unified program to drive more effective oversight and greater consistency, eliminate duplication and…