On February 4, 2020, BPI, along with the Structured Finance Association (SFA), offered comments to the FDIC in support of the agency’s proposed rulemaking on federal interest rate authority. The proposal mirrors that of the OCC, as both agencies seek to address the ruling by the Second Circuit in Madden v. Midland Funding, which called into question the enforceability of interest rate provisions of bank credit agreements following assignment of the loan to a nonbank. BPI and SFA expressed support for the FDIC’s proposed clarifications, which would codify the permissibility of the interest rate on a loan made pursuant to Section 27, as not being affected by any subsequent events or sales, assignments, or transfers of the loan. Further, the letter encouraged the FDIC to finalize the proposed rule as soon as possible to address uncertainty in the market and to harmonize the final rule with the parallel proposal from the OCC.
You Might Also Be Interested In...
Bank Activities and Structure
Our Assessment of the Federal Reserve’s Latest Semiannual Supervision and Regulation Report and Some Recommendations for Future Reports
Supervision & Enforcement
BPI Response to FSOC Guidance on the Designation of Systemically Important Non-Banks
Bank Activities and Structure
BPI Welcomes FDIC Action to Provide Certainty for Banks’ Second-Chance Hiring
More Posts by This Author