Date: October 31, 2020 

On October 27, 2020, the Office of the Comptroller of the Currency (OCC) issued its final “True Lender Rule.” As described in our original article found here the rule is intended to address when a national bank or federal savings association (each a “bank”) should be deemed a “true lender” of a loan.

By Anthony Santoriello

We wanted to create a resource to help answer some of the most commonly asked questions we receive from clients regarding the right entity structure for them.

Written July 24, 2020, updated September 20, 2020         

On July 20, 2020, the Office of the Comptroller of the Currency (OCC) issued a proposed rule that would address when a national bank or federal savings association (each a “bank”) should be deemed a “true lender” of a loan. Under the proposed rule, a bank makes a loan if, as of the date of origination, it is named as the lender in the loan agreement or funds the loan. Regardless of its final form, if passed the rule will have material effects on banks and those third parties that partner with banks.

On May 2, 2019, in JPMorgan Chase Bank, National Association v. Sean Gallagher and Hairong Wang (Docket No. 169 EDA 2018), the Pennsylvania Superior Court affirmed the decision of the Court of Common Pleas of Northampton County that granted Plaintiff’s motion for summary judgment and also affirmed two other trial court orders.

On March 27, 2019, in a case handled by PIB, New Jersey’s Appellate Division affirmed a trial court decision denying the defendant’s eleventh-hour motion to vacate a sheriff’s sale and restrain delivery of the deed to a third-party purchaser predicated on a novel – but incorrect – theory that a reinstatement quote constituted a binding contract.  The decision is significant because, had Defendant’s argument been successful, it could have created the threat of potential litigation based solely upon routine communications between servicers and borrowers.

The United States Supreme Court granted certiorari in Rotkiske v. Klemm, 890 F.3d 422 (3d Cir. 2018), in which the Third Circuit ruled, unanimously en banc, that the Fair Debt Collections Practices Act’s (“FDCPA”) one-year statute of limitations is not subject to an enlargement of time based on the “discovery rule,” but runs from the date of the occurrence. The Third Circuit’s decision is in contrast with the findings of the Ninth and Fourth Circuits, which have determined that the statute of limitations begins to run at the time of the violation’s discovery.  

On January 24, 2019, in U.S. Bank National Association, as trustee, on behalf of the Holders of the Asset Backed Pass-Through Certificates, Series RFC 2007-HE1 v. Eric Hayden and Miesha Hardison-Hayden (Docket No. A-1610-17T4), New Jersey’s Appellate Division affirmed the trial court decision that granted Plaintiff’s motion for summary judgment and struck Defendants’ answer and also affirmed two other trial court orders.