,,ii  #aaeth ,,congress  #ast ,session  
,s4 #afdb  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,july #bg1     
#bjag ,mr4 ,warner 7for himself1 ,mr4   
,toomey1 ,mr4 ,peters1 and ,mr4 ,daines7
 introduced the following bill2 which   
was read twice and referred to the      
,committee on ,banking1 ,housing1 and   
,urban ,affairs  ,a ,,bill  ,to amend   
the ,revised ,statutes1 the ,home       
,owners' ,loan ,act1 the ,federal       
,credit ,union ,act1 and the ,federal   
,deposit ,insurance ,act to require the 
rate of interest on certain loans remain
 unchanged after transfer of the loan1  
and for other purposes4  #a4 ,short     
title ,this ,act may be cited as the    
,protecting ,consumers' ,access to      
,credit ,act of #bjag4  #b4 ,findings   
,congress finds that-- 7#a7 the         
contractual doctrine of valid-when-made 
provides1 when applied to lending       
agreements1 that a loan that is valid at
 inception cannot become usurious upon  
the subsequent sale or transfer of the  

loan to another person2  7#b7 this      
important and longstanding principle    
derives from the common law and its     
application has been a cornerstone of   
,united ,states banking law for nearly  
#bjj years1 as provided in the case of  
,nichols v4 ,fearson1 #cb ,u4,s4 7#g    
,pet47 #ajc1 #ajf 7#ahcc71 in which the 
,supreme ,court of the ,united ,states  
famously declared3 8,yet the rule of law
 is everywhere acknowledged1 that a     
contract free from usury in its         
inception1 shall not be invalidated by  
any subsequent usurious transactions    
upon it402  7#c7 in #bjaf1 the          
,solicitor ,general of the ,united      
,states1 in consultation with all       
,federal banking regulators1 filed an   
amicus brief in the case of ,midland    
,funding1 ,,llc v4 ,madden1 #acf ,s4    
,ct4 #beje 7#bjaf7 7mem471 denying cert4
 to #ghf ,f4#c;d #bdf1 7#b;d ,cir4      
#bjae71 that described the ,united      
,states ,court of ,appeals for the      
,second ,circuit in that case as        

incorrect with an analysis reflecting a 
misunderstanding of section #he of the  
,national ,bank ,act and precedent of   
the ,supreme ,court of the ,united      
,states because the analysis            
contradicted the contractual doctrine of
 valid-when-made2  7#d7 the             
valid-when-made doctrine1 by bringing   
certainty to the legal treatment of all 
valid loans that are transferred1       
greatly enhances liquidity in the credit
 markets by widening the potential pool 
of loan buyers and reducing the cost of 
credit to borrowers at the time of      
origination2  7#e7 a joint academic     
study by professors at ,stanford1       
,fordham1 and ,columbia ,universities   
concluded that the ,madden v4 ,midland  
decision has already disproportionately 
affected low- and moderate-income       
individuals in the ,united ,states with 
lower ,,fico scores2 and  7#f7 if the   
valid-when-made doctrine is not         
reaffirmed soon by ,congress1 the lack  
of access to safe and affordable        

financial services will force the       
households in the ,united ,states with  
the fewest resources to seek financial  
products that are nontransparent1 fail  
to inform consumers about the terms of  
credit available1 and do not comply with
 ,state and ,federal laws1 including    
regulations4  #c4 ,rate of interest     
after transfer of loan  7a7 ,amendment  
to the ,revised ,statutes ,section #eaig
 of the ,revised ,statutes 7#ab         
,u4,s4,c4 #he7 is amended by adding at  
the end the following3 ,a loan that is  
valid when made as to its maximum rate  
of interest in accordance with this     
section shall remain valid with respect 
to such rate regardless of whether the  
loan is subsequently sold1 assigned1 or 
otherwise transferred to a third party1 
and may be enforced by such third party 
notwithstanding any ,state law to the   
contrary44  7b7 ,amendment to the ,home 
,owners' ,loan ,act ,section #d7;g7 of  
the ,home ,owners' ,loan ,act 7#ab      
,u4,s4,c4 #adfc7;g77 is amended by      

adding at the end the following3  7#c7  
,a loan that is valid when made as to   
its maximum rate of interest in         
accordance with this subsection shall   
remain valid with respect to such rate  
regardless of whether the loan is       
subsequently sold1 assigned1 or         
otherwise transferred to a third party1 
and may be enforced by such third party 
notwithstanding any ,state law to the   
contrary4  4  7c7 ,amendment to the     
,federal ,credit ,union ,act ,section   
#bje7;g7 of the ,federal ,credit ,union 
,act 7#ab ,u4,s4,c4 #aghe7;g77 is       
amended by adding at the end the        
following3  7#c7 ,a loan that is valid  
when made as to its maximum rate of     
interest in accordance with this        
subsection shall remain valid with      
respect to such rate regardless of      
whether the loan is subsequently sold1  
assigned1 or otherwise transferred to a 
third party1 and may be enforced by such
 third party notwithstanding any ,state 
law to the contrary4  4  7d7 ,amendment 

to the ,federal ,deposit ,insurance ,act
 ,section #bg of the ,federal ,deposit  
,insurance ,act 7#ab ,u4,s4,c4 #ahca;d7 
is amended by adding at the end the     
following3  7c7 ,a loan that is valid   
when made as to its maximum rate of     
interest in accordance with this section
 shall remain valid with respect to such
 rate regardless of whether the loan is 
subsequently sold1 assigned1 or         
otherwise transferred to a third party1 
and may be enforced by such third party 
notwithstanding any ,state law to the   
contrary4  4  #d4 ,rule of construction 
,nothing in this ,act may be construed  
as limiting the authority or            
jurisdiction of the ,office of the      
,comptroller of the ,currency1 the      
,federal ,deposit ,insurance            
,corporation1 the ,board of ,governors  
of the ,federal ,reserve ,system1 the   
,bureau of ,consumer ,financial         
,protection1 or the ,national ,credit   
,union ,administration4