The Office of the Comptroller of the Currency (OCC) on Monday proposed a new rule that would identify the “true lender” of a loan as the bank that “is named as the lender in the loan agreement” or “funds the loan.”
Several provisions of federal banking law grant banks the authority to make loans, but “none describes how to determine when a bank has, in fact, exercised this authority, and when, by contrast, the bank’s relationship partner has made the loan,” the OCC said in its proposal. At the moment, this ambiguity leaves it up to courts to determine the true lender when loans, sold by their original lender, end up in legal disputes.
