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John P. Kromer quoted in American Banker article, “OCC offers road map for banks to bypass ‘Madden’ ruling”

American Banker

John P. Kromer

John P. Kromer was quoted on November 18, 2019 in an American Banker article, “OCC offers road map for banks to bypass ‘Madden’ ruling,” which discussed the Office of the Comptroller of the Currency’s proposed plan for banks to be able to work around the 2015 Madden v. Midland Funding ruling that had restricted their ability to sell off loans. The article reported, “The OCC’s proposal cites federal law establishing that banks can enter into loan contracts, charge interest at the maximum rate permitted in the state where it is located, and subsequently assign the loan. ‘A bank’s well-established authority to assign a loan may be unduly curtailed if the bank cannot be certain that interest permissible prior to the assignment will remain permissible afterwards,’ the agency's notice of proposed rulemaking says.”

Kromer noted, “The proposal is a good first step in addressing the uncertainty for fintech firms following the Madden ruling. Companies that rely on the secondary market to purchase loans had concerns raised about loans originating in the 2nd Circuit. This [proposed] rulemaking would go a long way in addressing those concerns and potentially ease pressure in the markets in those states.”

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