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MoFo Reenforcement The Enforcement Blog

Following Suit – FDIC Finalizes Rule Reaffirming “Valid When Made” Doctrine for State Banks

Posted in Regulatory Developments

On June 25, 2020, following the OCC’s lead, the Federal Deposit Insurance Corporation’s (FDIC) board of directors voted 3-1 to finalize a rule that reaffirms the “valid when made” doctrine as applicable to loans originated by state-chartered banks and insured branches of foreign banks. The FDIC believes that reaffirmation of a state bank’s ability to assign loans at the contractual interest rate will make state-bank loans more marketable, mitigate the potential for future secondary-market disruption, and maintain parity between national banks and state banks with respect to interest rate exportation.

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