| Title: |
Permissible interest on loans that are sold, assigned, or otherwise transferred
|
| Subject: | Valid when made |
| Agency: | OCC |
| Status: | Final rule |
| Summary: | Federal law establishes that national banks and savings associations (banks) may charge interest on loans at the maximum rate permitted to any state-chartered or licensed lending institution in the state where the bank is located. In addition, banks are generally authorized to sell, assign, or otherwise transfer (transfer) loans and to enter into and assign loan contracts. Despite these authorities, recent developments have created legal uncertainty about the ongoing permissibility of the interest term after a bank transfers a loan. This rule clarifies that when a bank transfers a loan, the interest permissible before the transfer continues to be permissible after the transfer. |
| FR Doc: | 2020-11963 |
| Date proposed: | Nov. 18, 2019 |
| Comments due date: |
Jan. 21, 2020 |
| Final rule effective date: | Aug. 3, 2020 |
| Rule compliance date: | |
| Agency release: |
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| Related Reg Report item(s): |
Proposal aims to clarify ‘valid-when-made’ rule made murky under Madden decision |
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