On November 30, Washington D.C. introduced District of Columbia Council Bill B 25-0609, which would opt the state out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (“DIDMCA”) with respect to loans made in the District of Columbia, and would add “anti-evasion” and territorial application provisions to the D.C. Official Code (we discussed similar DIDMCA opt-out legislation in Colorado in a blog post here). Continue Reading Washington D.C. Introduced Rate Exportation Opt-Out and “Anti-Evasion” Bill

On October 9, Florida introduced SB 146, which amends the Florida Consumer Finance Act (CFA), and joins other states that have passed laws characterizing certain nonbanks as the “true lender” of loans made through a bank partnership and treats all payments incident to the loan as interest, even if voluntary.Continue Reading Florida Introduces “True Lender” Legislation

On November 7, the FTC and the State of Florida settled with a chargeback mitigation company and its owners for $150,000. The chargeback company was allegedly using deceptive practices, including referencing disclaimers that were not actually shown to the customers during the checkout process, to prevent consumers from disputing credit card charges through the chargeback process.Continue Reading FTC, Florida Settle with Chargeback Mitigation Company for $150K

In August, a New York federal district court denied a motion to dismiss a CFPB lawsuit against three affiliated companies engaged in the business of purchasing distressed consumer debt and several of the companies’ owners and officers. The CFPB’s lawsuit involves claims against the defendants for violations of the Consumer Financial Protection Act (“CFPA”) and Fair Debt Collection Practices Act (“FDCPA”) based on a theory of vicarious liability as a result of conduct of the companies’ third-party debt collection vendors.Continue Reading NY Federal Court Rules CFPB Vicarious Liability Suit Can Proceed

On September 8, a Texas federal judge ruled that the CFPB exceeded its authority by adopting a sweeping anti-discrimination policy last year. The CFPB adopted the policy in March 2022, via an update to its exam manual, stating that discrimination in any financial product is an “unfair” practice that can trigger liability under the federal prohibition against “unfair, deceptive or abusive acts or practices” or UDAAPs (we discussed this policy in previous posts here and here). The CFPB offered examples of practices that may be unfair because they are discriminatory, including offering one set of products or services to a certain customer demographic and a greater set of products or services to another customer demographic, providing inferior terms to one customer demographic as compared to another customer demographic, and engaging in targeted marketing or advertising in a discriminatory manner. Continue Reading Texas Court Strikes Down CFPB UDAAP Policy

Financial services companies beware: the new state privacy laws exemption are not uniform. To recap, there are privacy laws in 12 states: California, Colorado, Connecticut, Florida, Indiana, Iowa, Montana, Oregon, Tennessee, Texas, Utah, and Virginia. (Delaware’s law is pending the governor’s signature.)Continue Reading State Privacy Law Roundup: What Financial Services Entities Need to Know

In June, the Nevada governor signed SB 290 into law, making Nevada the first state to enact legislation creating a comprehensive statutory framework that specifically defines and regulates the provision of earned wage access (EWA) products. EWA products allow consumers to access their earned wages before their regularly scheduled pay date. While other states and federal agencies have made preliminary efforts to regulate EWA products, Nevada is the first state to impose certain substantive requirements on providers of EWA products, such as implementation of policies for responding to consumer complaints and mandatory disclosure to consumers of their rights, such rights including the ability to cancel EWA agreements at any time without being charged fees.Continue Reading Nevada EWA Legislation Creates Novel Regulatory Framework

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

On May 1, Georgia signed SB 90 to become the latest state to require disclosures for small-business financing (see our prior posts on this here, here, and here). Providers of commercial financing in the amount of $500,000 or less who conduct more than five transactions in Georgia annually will be required to comply with the new law. Among other exclusions from the legislation, it does not cover real-estate secured loans, purchase-money loans, motor-vehicle floor plan financing, credit extended in connection with the sale of the creditor’s goods or services, or if the lender makes 5 or fewer such loans in any 12-month period. The legislation will go into effect on January 1, 2024.Continue Reading Georgia Introduces New Commercial Financing Disclosure Requirements