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OCC urges court to uphold valid-when-made rule
On January 14, the OCC moved for summary judgment in an action filed by the California, Illinois, and New York attorneys general (collectively, “states”) challenging the OCC’s valid-when-made rule, arguing that the challenge is without merit and that the agency “reasonably interprets the ‘gap’ in [12 U.S.C. § 85] concerning what happens when a national bank sells, assigns, or transfers a loan.” As previously covered by InfoBytes, the OCC’s final rule was designed to effectively reverse the Second Circuit’s 2015 Madden v. Midland Funding decision and provides that “[i]nterest on a loan that is permissible under [12 U.S.C. § 85 for national bank or 12 U.S.C. § 1463(g)(1) for federal thrifts] shall not be affected by the sale, assignment, or other transfer of the loan.” The states challenged the rule, arguing that it is “contrary to the plain language” of section 85 (and section 1463(g)(1)) and “contravenes the judgment of Congress,” which declined to extend preemption to non-banks. Moreover, the states contend that the OCC “failed to give meaningful consideration” to the commentary received regarding the rule, essentially enabling “‘rent-a-bank’ schemes.”
In response, the OCC argued that not only does the final rule reasonably interpret the “gap” in section 85, it is consistent with section 85’s “purpose of facilitating national banks’ ability to operate their nationwide lending programs.” Moreover, the agency asserts that 12 U.S.C. § 25b’s preemption standards do not apply to the final rule, because, among other things, the OCC “has not concluded that a state consumer financial law is being preempted.” The final rule “addresses only the ‘substantive [ ] meaning’ of § 85” and Congress “expressly exempted OCC’s interpretations of § 85 from § 25b’s requirements.” Lastly, the OCC argued that it made an “informed and reasoned decision,” including addressing issues raised during the public comment period. Thus, the court should uphold the final rule and affirm summary judgment for the agency.
Illinois reissues and extends several Covid-19 executive orders
On January 8, the governor of Illinois issued Executive Order 2021-01 extending numerous executive orders through February 6, 2021 (previously covered here, here, here, here, and here). Among other things, the order extends: (i) Executive Order 2020-07 regarding in-person meeting requirements, (ii) Executive Order 2020-23 regarding actions by individuals licensed by the Illinois Department of Financial and Professional Regulation engaged in disaster response, (iii) Executive Order 2020-25 regarding garnishment and wage deductions (previously covered here), (iv) Executive Order 2020-30 regarding residential evictions (previously covered here and here).
Illinois reissues and extends several Covid-19 executive orders
On December 11, the governor of Illinois issued Executive Order 2020-74, which extends several executive orders through January 9, 2021 (previously covered here, here, here, and here). Among other things, the order extends: (i) Executive Order 2020-07 regarding in-person meeting requirements, (ii) Executive Order 2020-23 regarding actions by individuals licensed by the Illinois Department of Financial and Professional Regulation engaged in disaster response, (iii) Executive Order 2020-25 regarding garnishment and wage deductions (previously covered here), (iv) Executive Order 2020-30 regarding residential evictions (previously covered here and here), and (v) Executive Order 2020-72 regarding the residential eviction moratorium (previously covered here, here, here, and here).
Illinois extends prohibition on residential evictions
On November 13, the Illinois governor issued Executive Order 2020-72 further extending the state’s prohibition on residential evictions (previously covered here, here, and here).
Illinois governor suspends consumer garnishment and wage deductions
On November 13, the Illinois governor re-issued over 30 previous Covid-related executive orders that had previously been suspended. Of note, Executive Order 2020-55, which suspended portions of the Illinois Code of Civil procedure permitting service of a garnishment summons, wage deduction summons or a citation to discover assets on a consumer debtor, was reissued in its entirety and extended through December 12, 2020.
Illinois reissues and extends several Covid-19 executive orders
On October 16, the Illinois governor issued Executive Order 2020-59, which extends several earlier executive orders through November 14, 2020 (previously covered here, here, and here). Among other things, the order extends: (i) Executive Order 2020-07 regarding in-person meeting requirements, (ii) Executive Order 2020-23 regarding actions by individuals licensed by the Illinois Department of Financial and Professional Regulation engaged in disaster response, (iii) Executive Order 2020-25 regarding garnishment and wage deductions (previously covered here), and (iv) Executive Order 2020-30 regarding residential evictions (previously covered here and here).
Illinois reissues and extends several Covid-19 executive orders
On August 21, the Illinois governor issued Executive Order 2020-52, which extends several earlier executive orders through September 19, 2020. Among other things, the order extends Executive Order 2020-25 regarding garnishment and wage deductions (previously covered here) and Executive Order 2020-30 regarding residential evictions (previously covered here and here). However, Executive Order 2020-30 has been amended to provide that the moratorium on the enforcement of eviction orders for residential premises does not relieve an individual of the obligation to pay rent, make mortgage payments, or comply with any other obligation that the individual may have pursuant to a lease, rental agreement, or mortgage.
State AGs challenge OCC’s “valid-when-made” rule
On July 29, the California, Illinois, and New York attorneys general filed an action in the U.S. District Court for the Northern District of California challenging the OCC’s valid-when-made rule, arguing the rule “impermissibly preempts state law.” As previously covered by a Buckley Special Alert, on June 2 the OCC issued a final rule designed to effectively reverse the Second Circuit’s 2015 Madden v. Midland Funding decision. The “true lender” rule provides that “[i]nterest on a loan that is permissible under [12 U.S.C. 85 for national bank or 12 U.S.C 1463(g)(1) for federal thrifts] shall not be affected by the sale, assignment, or other transfer of the loan.”
The attorneys general argue in their complaint that the rule is “contrary to the plain language” of section 85 (and section 1463(g)(1)) and “contravenes the judgment of Congress,” which declined to extend preemption to non-banks. Moreover, the complaint asserts that the OCC disregarded congressional procedures for preemption by failing to perform a case-by-case review of state laws and not consulting with the CFPB before “preempting such a state consumer-protection law.” The attorneys general further contend that the OCC “failed to give meaningful consideration” to the commentary received regarding the rule essentially enabling “‘rent-a-bank’ schemes.” The result of the OCC’s actions, according to the attorneys general, is a rule that would allow “predatory lenders to evade state law by partnering with a federally chartered bank to originate loans exempt from state interest-rate caps.” These structures “have long troubled state law-enforcement efforts,” according to the complaint, and the rule will exacerbate these issues by “decreas[ing] licensing fees received by the States and increase[ing] the cost and burden of future supervisory, investigative, and law-enforcement efforts by the States.”
The complaint requests the court declare that the OCC violated the Administrative Procedures Act in issuing the rule and hold the rule unlawful.
Illinois reissues and extends several Covid-19 executive orders
On July 24, the Illinois governor issued Executive Order 2020-48, which extends several earlier executive orders through August 22, 2020. Among others, the order extends Executive Order 2020-25 regarding garnishment and wage deductions (previously covered here) and Executive Order 2020-30 regarding residential evictions (previously covered here and here).
Illinois reissues and extends several Covid-19 executive orders
On June 26, the Illinois governor issued Executive Order 2020-44, which reissues several executive orders issued to date, and extends a majority of the provisions therein through July 26, 2020. Among other things, the executive order extends Executive Order 2020-30, previously covered here, which prohibits residential evictions, subject to certain limited exceptions, through July 26.