1. Short title This Act may be cited as the Modernizing Credit Opportunities Act . 2. Findings Congress finds the following: (1) Insured depository institutions have found efficiencies in their lending operations through a variety of different relationships with nondepository institutions that perform different lending-related functions. (2) The Federal banking regulators have recognized that insured depository institutions may enter into relationships with third parties to originate loans, have recognized the benefits of these arrangements for institutions and borrowers alike, and have issued guidance to ensure the safety and soundness of such relationships and to protect borrowers. (3) Insured depository institutions routinely engage in third-party lending arrangements and regulators have long recognized that third-party lending arrangements provide institutions with the ability to supplement, enhance or expedite lending services for their customers, and that engaging in third-party lending arrangements also enables institutions to reduce the cost of delivering credit products, to expand access to credit, and to achieve strategic goals. (4) Litigation concerning loans made by an insured depository institution that involve arrangements with third parties that perform lending-related functions have required the courts to determine the identity and location of the lender but have reached inconsistent results. (5) Inconsistencies in the determinations of the identity and location of the lender under judicially crafted multi-factor balancing tests lessen the efficiency of the lending process, reduce the transparency of the lending process for both lenders and borrowers, and jeopardize the substantial benefits of third-party lending arrangements for borrowers and the economy. (6) In order to maximize efficiency and transparency, it is necessary to clarify and reinforce existing law by codifying clear and straightforward standards that establish that an insured depository institution is the lender on any loan or