(June 25, 2021) The Supreme Court ruled this week that the director of the Federal Housing Finance Authority (FHFA) may be fired by the president, overturning the agency’s structure which held that the director could only be removed “for cause” – and the same day, that’s what the president did. The White House said that President Joe Biden (D) had fired FHFA Director Mark Calabria (in office since 2019) and replaced him (as acting director) with Sandra Thompson, who has served as deputy director of the agency’s division of housing mission and goals since 2013. She worked before that for more than 23 years at the FDIC … The loan interest rate ceiling for federal credit unions will remain at 18% through March 10, 2023, under action taken Thursday by unanimous vote of the NCUA Board – the 23rd time the board has approved the ceiling since it was initially set in 1987 … Farewell to Jay Murray who has retired as CEO of Vizo Financial Corporate CU effective June 1 after nearly 30 years with the corporate — and congrats to David Brehmer who had been serving as president is now president and CEO of VFCCU … The House on Thursday joined the Senate (both with bipartisan – if narrowly so – votes) to repeal the OCC’s “true lender” rule. President Biden has indicated he will sign it into law. The rule, the first financial regulator rule from the Trump era to be overturned by Congress, aimed to determine when a bank is a “true lender” within the context of a partnership between it and a third party. It had been criticized by consumer groups and others, saying it leaves customers vulnerable to predatory “rent-a-bank” schemes, in which an agreement is made between a bank and a third party to advance the loan – but then the bank takes over the loan once the transaction is completed.

(May 14, 2021) The OCC has – once again – a new leader, who said this week he would soon conduct a review of “regulatory standards” at the agency.

Michael J. Hsu was named acting comptroller of the currency late last week by Treasury Secretary Janet Yellen, who has the power to designate an acting leader of the agency until one is confirmed by the Senate. The Biden Administration has not yet nominated anyone for a full, five-year term as comptroller.

Hsu, a former Federal Reserve regulator who oversaw supervision of “global systemically important banks” (G-SIBs), becomes the fifth leader of the national bank regulator since 2017 – and the fourth “acting comptroller” over that time span. He succeeded Blake Paulson, who had been serving in an acting capacity since January (Paulson has resumed his former post of chief operating officer of the agency).

In a statement to OCC staffers on his first day on the job (Monday, May 10), Hsu said he will be announcing a “review of key regulatory standards, as well as various matters that are pending before the agency,” with the review, he said, considering a full range of views inside and outside of the agency.

Meanwhile, also this week, the Senate voted to repeal the so-called “true lender” rule, an action taken by one of Hsu’s recent “acting comptroller” predecessors. The House is expected to vote soon; President Joe Biden (D) has said he would sign the repeal measure.

Adopted by the OCC in October (and which took effect Dec. 29) by then-Acting Comptroller Brian P. Brooks (after being initially proposed in July), the rule determines when a bank is a “true lender” within the context of a partnership between it and a third party. According to the OCC, the rule specifies that a bank makes a loan and is the true lender if, as of the date of origination, it: first, is named as the lender in the loan agreement, or; second, funds the loan.

Consumer groups and others (including CSBS) have criticized the rule, saying it amounts to an “end-run” around state laws meant to prohibit predatory lending practices, such as leaving customers vulnerable to “rent-a-bank” schemes, in which an agreement is made between a bank and a third party to advance the loan – but then the bank takes over the loan once the transaction is completed.

LINKS:
Michael J. Hsu Statement to Agency Employees on Becoming Acting Comptroller of the Currency

CSBS statement on Senate passage of the CRA joint resolution to strike down OCC true lender rule