On August 26, the United States District Court for the Southern District of Texas issued a decision upholding the legality of the CFPB Small Business Lending Rule (the “Rule”) (designed to implement section 1071 of the Dodd-Frank Act) in a lawsuit filed by plaintiff trade associations challenging the CFPB’s authority in promulgating the Rule (previously discussed here and here).Continue Reading Federal Court Upholds CFPB’s Small Business Lending Rule
On August 12, the National Consumer Law Center (NCLC), a prominent consumer advocacy group, petitioned the CFPB to open rulemaking under the Equal Credit Opportunity Act (ECOA) to expand the definition of “credit” to include housing and apartment rental leases, and “creditors” to include landlords. While acknowledging that landlords are already banned from discriminating against prospective tenants under the federal Fair Housing Act, the petition aims to secure two additional protections. Continue Reading Advocacy Group Petitions CFPB to Categorize Housing Rental Leases as “Credit”
Florida recently enacted H1347, revising the state’s criteria for what constitutes usurious consumer loans. Continue Reading New Florida Law Overhauls Consumer Finance Loan Interest Rate Requirements
On June 17, the Consumer Financial Protection Bureau filed an order to resolve its 2023 lawsuit against the former CEO of a short-term small dollar lender and his spouse, in connection with a series of fraudulent transfers they utilized to evade the civil penalties imposed by the CFPB against the company.Continue Reading CFPB Takes Action Against Owners of Small Dollar Lender for Hiding Money to Avoid Penalties
On May 16, the CFPB filed a motion for summary judgement in the U.S. District Court in the Southern District of Florida seeking a $20 million civil penalty against a California-based mortgage provider for allegedly submitting inaccurate government mortgage loan data.Continue Reading CFPB Files Motion for Summary Judgment on HMDA Enforcement Action
On May 17, Colorado’s governor signed the nation’s first artificial intelligence law designed to prevent algorithmic discrimination. The law is slated to go into effect on February 1, 2026.Continue Reading Colorado Enacts Nation’s First AI Discrimination Law
On April 22, the Governor of Tennessee signed HB 2100 into law. This new law, an amendment to the state’s consumer protection codes, introduces protections for consumers against discrimination by financial institutions and insurers in their service offerings.Continue Reading Tennessee New Law to Curb “De-Banking”
On March 5, the New York Attorney General filed a lawsuit against a network of over 30 lending companies and their officers alleging their involvement in a predatory “merchant cash advance” lending scheme that exploited New York businesses through fraudulent loans at “sky-high interest rates.” Continue Reading New York Attorney General Brings $1.4 Billion Lawsuit Against Merchant Cash Advance Lenders
In the latest development to challenges to the CFPB’s 1071 rulemaking, plaintiff trade associations, including the American Bankers Association and the Texas Bankers Association, have filed a motion for summary judgment requesting the court bar enforcement of the Bureau’s Small Business Lending Rule.Continue Reading Trade Groups Continue Fight Against CFPB’s 1071 Small Business Rulemaking
On February 21, the Minnesota Attorney General settled an action against executives of a Montana-based tribal lender for alleged predatory lending practices. In its complaint, filed in October 2023, the AG alleged the company engaged in, among other things, unfair, deceptive and abusive trade practices, unfair collections practices (resulting in a federal RICO charge), unlawful usury practices, and violations of Minnesota’s short-term lending statute, in making small dollar installment loans to consumers bearing interest rates between 474% and 795%. The company allegedly led many Minnesotans to believe that the tribal entity was immune from state laws guarding against interest rate limits on small and short-term loans, and implemented deceptive contractual provisions. Continue Reading Minnesota AG Bans Tribal Lender from Doing Business within the State
On June 23, in Soaring Pine v. Park St Grp, the Michigan Supreme Court held that under certain circumstances, a lender cannot avoid liability for charging illegally high interest rates by including a usury savings clause in loan documents that would reduce the applicable interest rate to the highest non-usurious interest rate permitted by applicable law. The court remanded a private equity firm’s breach-of-contract suit against a house-flipping company back to the trial court to determine whether the lender broke the law.Continue Reading Michigan Supreme Court Limits Applicability of Usury Savings Clauses