On August 2, New Hampshire passed House Bill 1243 (the “Bill”), which substantially amends its Motor Vehicle Retail Installment Sales Act (the “Act”). The Bill is effective as of August 2.Continue Reading New Hampshire Updates Motor Vehicle Retail Installment Act: What Lenders Need to Know
On May 16, the Maryland Office of Financial Regulation (“OFR”) announced a settlement with a Missouri-based bank and its fintech partners for engaging in unlicensed lending, credit repair, and debt collection activities.
In the OFR’s January 2021 Charge Letter, the agency alleged that the bank and its fintech partners violated Maryland law by its failure to hold a lending, debt collection, and credit repair license. According to the OFR, the bank offered in-store retail credit financing as well as store-branded credit cards to Maryland consumers. Continue Reading Maryland Banking Regulator Settles with Bank/Fintech Partnership For Unlicensed Lending, Credit Repair, and Debt Collection Activities
On May 21, the Massachusetts Attorney General entered into an Assurance of Discontinuance (“AOD”) with a California-based fintech alleging that it was the “true lender” of its consumer installment loans. Under the terms of the settlement, the fintech is required to pay $625,000 in restitution, request deletion of tradelines on credit reports for loans reported to credit bureaus, and cease doing business in the state. Continue Reading Massachusetts AG Forces Fintech from State as Part of “True Lender” Settlement
On March 25, Washington State became the latest in a growing list of jurisdictions to introduce a “true lender” law with the passing of bill SB 6025. The legislation, similar to laws in other states would characterize a person as the “lender” of a loan if the person makes a loan in excess of the state’s rate cap and if the person:Continue Reading Washington State Passes New “True Lender” Legislation
On March 25, a coalition of trade groups filed suit in the United States District Court for the District of Colorado, challenging a Colorado law which would have opted the state Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (“DIDMCA”), a federal law enacted to create competitive equality between state-chartered banks and national banks. The law, set to take effect on July 1, 2024, would have subject out-of-state lenders to the state’s rate cap. Continue Reading Lenders Sue to Block Colorado’s Interest Rate ‘Opt-Out’ Law
On January 29, a Missouri-based bank and its Kansas-based fintech loan servicer filed a joint motion to dismiss a purported class action filed against them alleging violations of the Georgia Installment Loan Act (GILA) and state RICO law, arising out of a consumer installment loan. Continue Reading Bank Partnership Moves to Dismiss Class Action Asserting Violations of Georgia Rate Cap Law
More “true lender” laws are coming, as legislative bodies in Washington, Maryland, and the District of Columbia have introduced bills that would severely impact bank partnership arrangements. Continue Reading More States on the Cusp of Enacting “True Lender” Laws
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 October 30, the Superior Court of California County of Los Angeles denied the DFPI’s motion for a preliminary injunction to force a Chicago-based fintech company to stop facilitating loans to California borrowers from its bank partner at interest rates above California’s interest rate cap (generally 36% for loans less than $10,000) (we previously discussed this case here and here).Continue Reading California Court Denies DFPI’s Motion for Preliminary Injunction Against Fintech
Earlier this month, the Colorado legislature voted to approve HB23-1229, which would opt the State out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (“DIDMCA”), a federal law enacted to create competitive equality between state-chartered banks and national banks. Section 521 gives federally insured banks, state credit unions, and state savings institutions the ability to export the interest permitted under their home state laws to borrowers in other states notwithstanding any interest limitations in the borrower’s state.Continue Reading Colorado Approves DIDMCA Opt-Out, Raising Concerns for Consumer Credit Access