Raising of Longstanding OCC Consent Order May Signal Improved Environment for Bank Partnerships

CUSTOMER ALERT

On February 14, any office of the Comptroller for the Currency (OCC) terminated a longstanding cease-and-desist purchase against payday lender ACE money Express, Inc. underneath the regards to your order, which was indeed in effect since 2002, ACE money was prohibited from “entering into any type of written or dental contract to offer any services, including payday financing, to any nationwide bank or its subsidiaries minus the previous approval for the OCC.” The raising the order ended up being done without fanfare, and also the OCC would not issue a news release or any other statements that are public the reasons for the action. But, we believe it would likely portend a great mindset at the federal degree toward “bank model” lending relationships.

The OCC put ACE Cash underneath the 2002 purchase in reaction to alleged unsafe and unsound practices that amounted to a “pattern of mismanagement” associated with the policies and procedures of Goleta National Bank, the nationwide bank with which ACE maintained a financing relationship. The precise allegations included gross carelessness in the control of loan files ( ag e.g., 641 files had been allegedly disposed of by tossing them in to a dumpster) and systemic problems in recordkeeping that lead to many violations associated with the Equal Credit chance while the Truth In Lending Acts.Continue reading