[Federal Register Volume 84, Number 225 (Thursday, November 21, 2019)]
[Proposed Rules]
[Pages 64229-64232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25280]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 84, No. 225 / Thursday, November 21, 2019 /
Proposed Rules
[[Page 64229]]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 7 and Part 160
[Docket ID OCC-2019-0027]
RIN 1557-AE73
Permissible Interest on Loans That Are Sold, Assigned, or
Otherwise Transferred
AGENCY: Office of the Comptroller of the Currency, Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: Federal law establishes that national banks and savings
associations (banks) may charge interest at the maximum rate permitted
to any state-chartered or licensed lending institution in the state
where the bank is located. Federal law also provides national banks and
Federal savings associations with the authority to enter into and
assign contracts. Well-established authority also authorizes banks to
sell, assign, or otherwise transfer loans. Despite these clear
authorities, recent developments have created uncertainty about the
ongoing validity of the interest term after a bank sells, assigns, or
otherwise transfers a loan. This rule would clarify that when a bank
sells, assigns, or otherwise transfers a loan, interest permissible
prior to the transfer continues to be permissible following the
transfer.
DATES: Comments must be received by January 21, 2020.
ADDRESSES: Commenters are encouraged to submit comments through the
Federal eRulemaking Portal or email, if possible. Please use the title
``Permissible Interest on Loans that are Sold, Assigned, or Otherwise
Transferred'' to facilitate the organization and distribution of the
comments. You may submit comments by any of the following methods:
Federal eRulemaking Portal--Regulations.gov Classic or
Regulations.gov Beta.
Regulations.gov Classic: Go to https://www.regulations.gov/. Enter
``Docket ID OCC-2019-0027'' in the Search Box and click ``Search.''
Click on ``Comment Now'' to submit public comments. For help with
submitting effective comments please click on ``View Commenter's
Checklist.'' Click on the ``Help'' tab on the Regulations.gov home page
to get information on using Regulations.gov, including instructions for
submitting public comments.
Regulations.gov Beta: Go to https://beta.regulations.gov/ or click
``Visit New Regulations.gov Site'' from the Regulations.gov Classic
homepage. Enter ``Docket ID OCC-2019-0027'' in the Search Box and click
``Search.'' Public comments can be submitted via the ``Comment'' box
below the displayed document information or by clicking on the document
title and then clicking the ``Comment'' box on the top-left side of the
screen. For help with submitting effective comments please click on
``Commenter's Checklist.'' For assistance with the Regulations.gov Beta
site, please call (877) 378-5457 (toll free) or (703) 454-9859 Monday-
Friday, 9 a.m.-5 p.m. ET or email [email protected].
Email: [email protected].
Mail: Chief Counsel's Office, Attention: Comment
Processing, Office of the Comptroller of the Currency, 400 7th Street
SW, Suite 3E-218, Washington, DC 20219.
Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218,
Washington, DC 20219.
Fax: (571) 465-4326.
Instructions: You must include ``OCC'' as the agency name and
``Docket ID OCC-2019-0027'' in your comment. In general, the OCC will
enter all comments received into the docket and publish the comments on
the Regulations.gov website without change, including any business or
personal information provided such as name and address information,
email addresses, or phone numbers. Comments received, including
attachments and other supporting materials, are part of the public
record and subject to public disclosure. Do not include any information
in your comment or supporting materials that you consider confidential
or inappropriate for public disclosure.
You may review comments and other related materials that pertain to
this rulemaking action by any of the following methods:
Viewing Comments Electronically--Regulations.gov Classic
or Regulations.gov Beta.
Regulations.gov Classic: Go to https://www.regulations.gov/. Enter
``Docket ID OCC-2019-0027'' in the Search box and click ``Search.''
Click on ``Open Docket Folder'' on the right side of the screen.
Comments and supporting materials can be viewed and filtered by
clicking on ``View all documents and comments in this docket'' and then
using the filtering tools on the left side of the screen. Click on the
``Help'' tab on the Regulations.gov home page to get information on
using Regulations.gov. The docket may be viewed after the close of the
comment period in the same manner as during the comment period.
Regulations.gov Beta: Go to https://beta.regulations.gov/ or click
``Visit New Regulations.gov Site'' from the Regulations.gov Classic
homepage. Enter ``Docket ID OCC-2019-0027'' in the Search Box and click
``Search.'' Click on the ``Comments'' tab. Comments can be viewed and
filtered by clicking on the ``Sort By'' drop-down on the right side of
the screen or the ``Refine Results'' options on the left side of the
screen. Supporting materials can be viewed by clicking on the
``Documents'' tab and filtered by clicking on the ``Sort By'' drop-down
on the right side of the screen or the ``Refine Results'' options on
the left side of the screen. For assistance with the Regulations.gov
Beta site, please call (877) 378-5457 (toll free) or (703) 454-9859
Monday-Friday, 9 a.m.-5 p.m. ET or email
[email protected]. The docket may be viewed after the
close of the comment period in the same manner as during the comment
period.
Viewing Comments Personally: You may personally inspect
comments at the OCC, 400 7th Street SW, Washington, DC 20219. For
security reasons, the OCC requires that visitors make an appointment to
inspect comments. You may do so by calling (202) 649-6700 or, for
persons who are deaf or hearing impaired, TTY, (202) 649-5597. Upon
arrival, visitors will be required to present valid government-issued
photo identification and submit to security screening in order to
inspect comments.
FOR FURTHER INFORMATION CONTACT: Andra Shuster, Senior Counsel, Karen
[[Page 64230]]
McSweeney, Special Counsel, or Priscilla Benner, Attorney, Chief
Counsel's Office, (202) 649-5490, for persons who are deaf or hearing
impaired, TTY, (202) 649-5597, Office of the Comptroller of the
Currency, 400 7th Street SW, Washington, DC 20219.
SUPPLEMENTARY INFORMATION:
I. Background
Federal law authorizes national banks and savings associations
(banks) to charge interest at the maximum rate permitted to any state-
chartered or licensed lending institution in the state where the bank
is located. Pursuant to Federal law, national banks and Federal savings
associations may also enter into contracts. Inherent in this authority
is the authority to assign such contracts. In addition, well-
established authority authorizes banks to sell, assign, or otherwise
transfer their loans.
Despite these clear authorities, recent developments have created
uncertainty about the ongoing validity of the interest term after a
bank sells, assigns, or otherwise transfers a loan. After considering
the principles discussed below, the OCC has concluded that when a bank
sells, assigns, or otherwise transfers a loan, interest permissible
prior to the transfer continues to be permissible following the
transfer. This proposed rule would codify this conclusion.
II. Analysis
Various provisions of Federal banking law, taken together, show
that Congress created an integrated Federal scheme that permits
national banks and Federal savings associations to operate across state
lines without being hindered by differing state laws. See, e.g., 12
U.S.C. 24, 85, 86, 371, and 1461 et seq. The National Bank Act (NBA)
provides for a system of national banks to serve as ``instrumentalities
of the federal government,'' \1\ which are ``designed to be used to aid
the government in the administration of an important branch of the
public service.'' \2\ The NBA contemplates that national banks will
operate nationwide, and accordingly, it provides national banks
``protection from `possible unfriendly State legislation.' '' \3\
Similarly, through the Home Owners' Loan Act (HOLA), ``Congress
delegated to the [Federal Home Loan Bank Board (FHLBB)] broad authority
to establish and regulate `a uniform system of [savings and loan]
institutions where there are not any now,' and to `establish them with
the force of the government behind them, with a national charter.' ''
\4\
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\1\ Davis v. Elmira Sav. Bank, 161 U.S. 275, 283 (1896).
\2\ Farmers' & Mechanics' Nat'l Bank v. Dearing, 91 U.S. 29, 33
(1875).
\3\ Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 10 (2003)
(quoting Tiffany v. Nat'l Bank of Mo., 85 U.S. 409, 412 (1873)).
\4\ Fid. Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141,
166 (1982) (citations and footnote omitted).
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To carry out Congress's purposes, the NBA vests in national banks
enumerated powers and ``all such incidental powers as shall be
necessary to carry on the business of banking.'' 12 U.S.C. 24(Seventh).
HOLA provides Federal savings associations with broad authority to
engage in banking activities. 12 U.S.C. 1464. These statutes grant
national banks and Federal savings associations the power to make
contracts, 12 U.S.C. 24(Third) and 1464,\5\ and the power to lend
money. 12 U.S.C. 24(Seventh) and 1464.
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\5\ Office of Thrift Supervision (OTS) letter from Carolyn J.
Buck, November 22, 1995, 1995 WL 790839.
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While not expressly stated in these statutes, among the essential
rights normally associated with the power to contract is the ability to
subsequently assign some or all of the benefits of a contract to a
third party.\6\ Restatement (Second) of Contracts Sec. 317 (1981).
Generally, all contract rights may be assigned in the absence of clear
language expressly prohibiting the assignment or if the assignment
would ``[(1)] materially change the duty of the obligor or [(2)]
materially increase the obligor's burden or risk under the contract or
[(3)] the contract involves obligations of a personal nature.'' 29
Williston on Contracts Sec. 74:10 (4th ed.) (citations omitted). But
see 29 Williston on Contracts Sec. 74:23 (stating that certain
assignments may be specifically forbidden by statute or may otherwise
be void as against public policy). All ordinary business contracts are
assignable, and a contract for money to become due in the future is
among the types of contracts that normally may be assigned.\7\ Upon
assignment, the third-party assignee steps into the shoes of the bank;
the assignee acquires and may enforce the rights the bank assigned to
it under the contract.\8\
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\6\ Rights authorized by a statute need not always be express--
they are often implicit in the other rights given by the statute.
See, e.g., Franklin Nat'l Bank v. New York, 347 U.S. 373, 377-78
(1954) (concluding that the right to accept savings deposits
implicitly included the right to advertise).
\7\ See Bank of America, N.A. v. Rice, 780 SE2d 873 (N.C. Ct.
App. 2015).
\8\ Dean Witter Reynolds Inc. v. Var. Annuity Life Ins. Co., 373
F.3d 1100, 1110 (10th Cir. 2004) (stating that it was long-
established that ``an assignee stands in the shoes of the
assignor'').
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In the banking context, the authority of banks to sell, assign, or
otherwise transfer (assign) a loan is a well-established element of the
authority to make loans. Since at least 1848, the Supreme Court has
recognized that a bank's authority to assign a loan is a power incident
to the authority to make one, even if assignment is not expressly
mentioned in the statute.\9\ Thus, the Federal statutes that provide
national banks and Federal savings associations the authority to make
loans also confer upon them the power to assign loans. 12 U.S.C.
24(Seventh), 371, and 1464(c); see also 12 CFR 7.4008(a), 34.3, and
160.30.
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\9\ See Planters' Bank of Miss. v. Sharp, 47 U.S. 301, 322-23
(1848); see also supra note 6.
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As part of the authority to lend granted to national banks, Federal
law establishes a clear and comprehensive scheme governing the interest
that a bank may charge. Twelve U.S.C. 85 provides that a national bank
may ``charge on any loan . . . interest at the rate allowed by the laws
of the State . . . where the bank is located.'' \10\ Similarly, 12
U.S.C. 1463(g), which is modeled on and interpreted in pari materia
with section 85,\11\ provides that savings associations may
``[n]otwithstanding any State law . . . charge interest . . . at the
rate allowed by the laws of the State in which such savings association
is located.'' \12\
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\10\ Alternatively, section 85 allows a national bank to charge
``1 per centum in excess of the discount rate on ninety-day
commercial paper in effect at the Federal reserve bank in the
Federal reserve district where the bank is located.'' 12 U.S.C. 85.
Through interpretive letters, the OCC has addressed where a national
bank is located for purposes of section 85. See, e.g., OCC
Interpretive Letter 822 (Feb. 17, 1998).
\11\ See Gavey Props./762 v. First Fin. Sav. & Loan Ass'n, 845
F.2d 519, 521 (5th Cir. 1988) (``Given the similarity of language,
the conclusion is virtually compelled that Congress sought to
provide federally insured credit institutions with the same `most-
favored lender' status enjoyed by national banks.''); 61 FR 50951,
50968 (Sept. 30, 1996) (``OTS and its predecessor, the FHLBB, have
long looked to the OCC regulation and other precedent interpreting
the national bank most favored lender provision for guidance in
interpreting [12 U.S.C. 1463(g)] and OTS's implementing
regulation.''); OTS letter from Harris Weinstein, December 24, 1992,
1992 WL 12005275.
\12\ Section 1463(g) also allows savings associations to charge
an alternate rate that is based on the relevant Federal Reserve
discount rate for 90-day commercial paper. See supra note 10.
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The intent of Congress when it originally enacted section 85 in
1864 was to ensure parity between national and state banks in order to
allow the new Federal charter to flourish and to establish a uniform
national currency.\13\ When Congress enacted section 1463(g), it
intended to place savings associations on equal footing with their
national bank competitors. See supra note 11.
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\13\ Cong. Globe, 38th Cong., 1st Sess., 2123-27 (1864). See
Roper v. Consurve, Inc., 578 F.2d 1106 (5th Cir. 1978), affirmed 445
U.S. 326 (1980).
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[[Page 64231]]
Sections 85 and 1463(g) have been interpreted to permit a bank to
charge interest at the highest rate allowed to competing lenders by the
state where the bank is located (known as the ``most favored lender''
doctrine) and to export this rate to borrowers in other states,
regardless of any other state law purporting to limit the interest
permitted on bank loans.\14\
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\14\ See Marquette Nat'l Bank of Minneapolis v. First of Omaha
Serv. Corp., 439 U.S. 299, 310-14 (1978) (``[The bank] cannot be
deprived of [its] location merely because it is extending credit to
residents of a foreign State.'').
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Federal law thus establishes that a bank may enter into a loan
contract, charge interest at the maximum rate permitted in the state
where it is located, and subsequently assign the loan. These
authorities, in turn, provide the fundamental transactional building
blocks that are used to construct important portions of the nation's
banking system. For example, the ability to originate loans and
subsequently securitize them on the secondary market depends upon the
ability of banks to assign all or part of their ownership interest in a
loan.
Despite the fact that these well-established and heretofore well-
understood authorities previously had not been seriously called into
question, a recent decision from the United States Court of Appeals for
the Second Circuit has created uncertainty regarding the ongoing
validity of the interest term determined under section 85 after a
national bank assigns a loan.\15\ Through this rulemaking, the OCC
seeks to end this uncertainty by clarifying that when a bank assigns a
loan, interest permissible prior to the assignment will continue to be
permissible following the assignment.
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\15\ See Madden v. Midland Funding, LLC, 786 F.3d 246 (2nd Cir.
2015).
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Multiple legal principles support the OCC's interpretation. First,
well before the passage of the NBA or the HOLA, the Supreme Court
recognized the longstanding common law principle of valid-when-made and
described it as a ``cardinal rule[ ] in the doctrine of usury.'' \16\
The valid-when-made principle provides that if a loan is non-usurious
at origination, the loan does not subsequently become usurious when
assigned.\17\ This longstanding rule relating to usury certainly
applies here; a loan by a bank that complies with section 85 or 1463(g)
is by definition not usurious when it is originated, and a subsequent
assignment of the loan does not render the loan usurious.
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\16\ See Nichols v. Fearson, 32 U.S. (7 Pet.) 103, 109 (1833).
\17\ See id. (``[A] contract, which, in its inception, is
unaffected by usury, can never be invalidated by any subsequent
usurious transaction.''); Gaither v. Farmers & Mechs. Bank of
Georgetown, 26 U.S. (1 Pet.) 37, 43 (1828).
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Apart from being the natural result if one applies the valid-when-
made principle, this conclusion is also supported by banks' ability to
assign contracts. As noted above, national banks and Federal savings
associations may assign their loan contracts to third parties. Because
the assignee steps into the bank's shoes upon assignment, the third
party receives the benefit of and may enforce the permissible interest
term. Again, the loan does not become usurious after the assignment
simply because the third party is enforcing the contractually agreed
upon interest term.\18\ An assignment does not normally change the
borrower's obligation to repay in any material way. See 29 Williston on
Contracts Sec. 74:10.
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\18\ See Olvera v. Blitt & Gaines, P.C., 431 F.3d 285, 286, 289
(7th Cir. 2005) (``[T]he assignee of a debt . . . is free to charge
the same interest rate that the assignor . . . charged the debtor .
. . even if the assignee does not have a license that expressly
permits the charging of a higher rate.'').
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Finally, 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.
Congress would not have intended to limit banks' authority in this
manner.\19\ Even in the mid-nineteenth century, banks' ability to
assign their loans was recognized as an important tool to manage
liquidity and enhance safety and soundness. As the Supreme Court
stated, ``[banks] must be able to assign or sell [their] notes when
necessary and proper, as, for instance, to procure more specie in an
emergency, or return an unusual amount of deposits withdrawn, or pay
large debts for a banking-house.'' \20\ The Court further observed that
while a bank may have other tools to respond to these circumstances,
assigning loans may be the ``wiser and safer'' course of action.\21\
Although the banking system has evolved significantly in the 150 years
since Planters' Bank, banks of all sizes continue to routinely rely on
loan assignments and securitization to access alternative funding
sources, manage concentrations, improve financial performance ratios,
and more efficiently meet customer needs. This risk management tool
would be significantly weakened if the permissible interest on assigned
loans were uncertain or if assignment of the permissible interest were
limited only to third parties that would be subject to the same or
higher usury caps.
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\19\ See Franklin, 347 U.S. at 377-78.
\20\ Planters' Bank of Miss., 47 U.S. at 323.
\21\ Id.
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The conclusion that interest permissible prior to the assignment of
a loan continues to be permissible following the assignment is also
consistent with the purpose of sections 85 and 1463(g)--to facilitate
banks' ability to operate across state lines by eliminating the burden
of complying with each state's interest laws. This ability to operate
on an interstate basis under a uniform set of standards, including with
respect to interest, is fundamental to the character of national banks
and has been since their inception.\22\ Recognizing the value of this
uniformity in applicable interest law, Congress extended the principles
of section 85 to savings associations, state-chartered insured
depository institutions, and insured credit unions in 1980. See 12
U.S.C. 1463(g), 1785, and 1831d. Then, in 2010, while carefully
examining the application of state law to Federally-chartered banks,
Congress expressly preserved national banks' authority under section 85
and thereby reaffirmed the importance of section 85 and similar
statutes to the banking system.\23\ Reading sections 85 and 1463(g) as
applying only to loans that a bank holds on its books would thwart this
statutory scheme and would be inconsistent with the valid-when-made and
assignability principles discussed above.
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\22\ ``National banks have been National favorites . . . It
could not have been intended, therefore, to expose them to the
hazard of unfriendly legislation by the States . . . .'' Tiffany, 85
U.S. at 413. The NBA ``has in view the erection of a system
extending throughout the country, and independent, so far as powers
conferred are concerned, of state legislation which, if permitted to
be applicable, might impose limitations and restrictions as various
and as numerous as the states.'' Easton v. Iowa, 188 U.S. 220, 229
(1903).
\23\ Section 1044(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, Public Law 111-203, 124 Stat. 1376 (July
21, 2010).
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Based on the foregoing, the OCC concludes that, as a matter of
Federal law, banks may assign their loans without impacting the
validity or enforceability of the interest.
III. Summary of the Proposal
The OCC would amend 12 CFR 7.4001 and 12 CFR 160.110 by adding a
new paragraph, which would provide that interest on a loan that is
permissible under sections 85 and 1463(g)(1), respectively, shall not
be affected by the sale, assignment, or other transfer of the loan.\24\
This rule would
[[Page 64232]]
expressly codify what the OCC and the banking industry have always
believed and address recent confusion about the impact of an assignment
on the permissible interest. This rule would not address which entity
is the true lender when a bank makes a loan and assigns it to a third
party. The true lender issue, which has been considered by courts
recently, is outside the scope of this rulemaking.
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\24\ The Federal Deposit Insurance Corporation (FDIC) is also
proposing a similar rule based on 12 U.S.C. 1831d. The FDIC has
interpreted this provision to be consistent with section 85
(including OCC precedent). See, e.g., FDIC General Counsel's Opinion
No. 11, Interest Charges by Interstate State Banks, 63 FR 27282 (May
18, 1998).
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IV. Solicitation of Comments
The OCC invites comment on all aspects of this proposal.
V. Regulatory Analyses
Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act
of 1995 (PRA), 44 U.S.C. 3501 et seq., the OCC may not conduct or
sponsor, and respondents are not required to respond to, an information
collection unless it displays a currently valid Office of Management
and Budget (OMB) control number. The OCC has reviewed the notice of
proposed rulemaking and determined that it would not introduce any new
or revise any existing collection of information pursuant to the PRA.
Therefore, no submission will be made to OMB for review.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq.,
requires an agency, in connection with a proposed rule, to prepare an
Initial Regulatory Flexibility Analysis describing the impact of the
rule on small entities (defined by the Small Business Administration
(SBA) for purposes of the RFA to include commercial banks and savings
institutions with total assets of $600 million or less and trust
companies with total assets of $41.5 million of less) or to certify
that the proposed rule would not have a significant economic impact on
a substantial number of small entities. The OCC currently supervises
approximately 755 small entities.\25\ The ability to sell, assign, or
otherwise transfer a loan is important to all banks, so the OCC expects
that all of these small entities would be impacted by the rule.
However, the rule does not contain any new recordkeeping, reporting, or
significant compliance requirements. Therefore, the OCC anticipates
that costs, if any, will be de minimis and certifies that this rule, if
adopted, would not have a significant economic impact on a substantial
number of small entities. Accordingly, a Regulatory Flexibility
Analysis is not required.
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\25\ The OCC bases its estimate of the number of small entities
on the SBA's size thresholds for commercial banks and savings
institutions, and trust companies, which are $600 million and $41.5
million, respectively. Consistent with the General Principles of
Affiliation, 13 CFR 121.103(a), the OCC counts the assets of
affiliated financial institutions when determining if the OCC should
classify an OCC-supervised institution as a small entity. The OCC
uses December 31, 2018, to determine size because a ``financial
institution's assets are determined by averaging the assets reported
on its four quarterly financial statements for the preceding year.''
See footnote 8 of the SBA's Table of Size Standards.
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Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1532,
requires the OCC to consider whether the proposed rule includes a
Federal mandate that may result in the expenditure by state, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more in any one year (adjusted for inflation). The proposed
rule does not impose new mandates. Therefore, the OCC concludes that
implementation of the proposed rule would not result in an expenditure
of $100 million (adjusted for inflation) or more annually by state,
local, and tribal governments, or by the private sector.
Riegle Community Development and Regulatory Improvement Act
Pursuant to section 302(a) of the Riegle Community Development and
Regulatory Improvement Act of 1994 (RCDRIA), 12 U.S.C. 4802(a), in
determining the effective date and administrative compliance
requirements for new regulations that impose additional reporting,
disclosure, or other requirements on insured depository institutions,
the OCC must consider, consistent with principles of safety and
soundness and the public interest, any administrative burdens that such
regulations would place on depository institutions, including small
depository institutions, and customers of depository institutions, as
well as the benefits of such regulations. In addition, section 302(b)
of RCDRIA, 12 U.S.C. 4802(b), requires new regulations and amendments
to regulations that impose additional reporting, disclosures, or other
new requirements on insured depository institutions generally to take
effect on the first day of a calendar quarter that begins on or after
the date on which the regulations are published in final form. The OCC
invites comments that will inform its consideration of RCDRIA.
List of Subjects
12 CFR Part 7
National banks, Interest, Usury.
12 CFR Part 160
Savings associations, Interest, Usury.
Office of the Comptroller of the Currency
For the reasons set out in the preamble, the OCC proposes to amend
12 CFR part 7 and part 160 as follows.
PART 7--ACTIVITIES AND OPERATIONS
0
1. The authority citation for part 7 continues to read as follows:
Authority: 12 U.S.C. 1 et seq., 25b, 29, 71, 71a, 92, 92a, 93,
93a, 95(b)(1), 371, 371d, 481, 484, 1463, 1464, 1465, 1818, 1828(m)
and 5412(b)(2)(B).
Subpart D--Preemption
0
2. Section 7.4001 is amended by adding paragraph (e) to read as
follows:
Sec. 7.4001 Charging interest by national banks at rates permitted
competing institutions; charging interest to corporate borrowers.
* * * * *
(e) Transferred loans. Interest on a loan that is permissible under
12 U.S.C. 85 shall not be affected by the sale, assignment, or other
transfer of the loan.
PART 160--LENDING AND INVESTMENT
0
3. The authority citation for part 160 continues to read as follows:
Authority: 12 U.S.C. 1462a, 1463, 1464, 1467a, 1701j-3, 1828,
3803, 3806, 5412(b)(2)(B); 42 U.S.C. 4106.
0
4. Section 160.110 is amended by adding paragraph (d) to read as
follows:
Sec. 160.110 Most favored lender usury preemption for all savings
associations.
* * * * *
(d) Transferred loans. Interest on a loan that is permissible under
12 U.S.C. 1463(g)(1) shall not be affected by the sale, assignment, or
other transfer of the loan.
Dated: November 18, 2019.
Morris R. Morgan,
First Deputy Comptroller, Comptroller of the Currency.
[FR Doc. 2019-25280 Filed 11-20-19; 8:45 am]
BILLING CODE 4810-33-P