On January 22, 2024, the Federal Trade Commission (FTC) entered into a Stipulated Order for Permanent Injunction, Monetary Judgment, and Other Relief (the “Order”) with FloatMe Corp. (“FloatMe”), a fintech that offers short-term cash advances through its mobile app, to settle litigation brought earlier in the month against the fintech and two of its principals (collectively, “Defendants”).… Continue Reading

Maryland has joined the ranks of states considering legislation that would codify elements of “true lender” theory in an effort to impose federally preempted state licensing requirements and rate caps on loans to Maryland residents.

House Bill 254 (HB 254), introduced on January 10, 2024 in the Maryland House of Delegates, would add Subtitle 15 – the “True Lender Act” – to Title 12 (Credit Regulations) of the Maryland Commercial Law.… Continue Reading

This special podcast episode, hosted by Senior Counsel and former Consumer Financial Services Practice Leader Alan Kaplinsky, sets the stage for the upcoming oral argument in the two U.S. Supreme Court cases where the fate of Chevron deference hangs in the balance. This episode provides an essential roadmap for anyone who will listen to the oral argument or is following this critical challenge to this important doctrine.… Continue Reading

In remarks to the press and public on January 2, 2024, New York Governor Kathy Hochul announced “a sweeping consumer protection and affordability agenda”, including proposed actions to “strengthen consumer protections against unfair business practices” and “establish nation-leading regulations for the Buy Now Pay Later loan industry”.

The Governor vowed to pursue “the first major expansion to New York consumer protection laws since 1980” to curb “predatory” business practices and “exploitative tactics” that harm consumers, citing student loan servicers and debt collectors as examples of consumer financial services businesses that should be subjected to further legal constraints.… Continue Reading

House Bill 1874 (H.B. 1874), denominated the “predatory loan prevention act”, was pre-filed for introduction in the Washington state legislature December 5, 2023, and referred to the House Committee on Consumer Protection and Business on January 8, 2024. H.B. 1874 is scheduled for public hearing on January 10, 2024 in the Washington House Committee on Consumer Protection & Business at 1:30 p.m.… Continue Reading

District of Columbia Council Bill B 25-0609, which would opt out of Section 27 of the Federal Deposit Insurance Act (“FDIA”) with respect to loans made in the District of Columbia, was introduced in the District of Columbia Council on November 30, 2023, and referred to the Council’s Committee on Business and Economic Development on December 5, 2023.… Continue Reading

Providers of consumer financial services that rely on federal preemption to charge customers uniform interest rates and fees on a nationwide basis are currently facing a series of legislative and litigation challenges.  In this episode, which repurposes a recent webinar, we first discuss the U.S. Supreme Court’s grant of certiorari in Cantero v.… Continue Reading

Florida SB 146, a bill that would add a “Predatory loan prevention” section to the Florida Consumer Finance Act has been introduced in the Florida Senate, seeking to curb bank-model lending programs and codify a “true lender” analysis with language similar to legislation enacted in Minnesota and other states within the past three years.… Continue Reading

On November 30, 2023 at 12:30 PM, ET, Ballard Spahr will hold a webinar entitled “Recent Important Developments in Federal Preemption for National and State Banks: What They Mean for Bank and Nonbank Consumer Financial Services Providers” during which this case will be dissected.

In a lengthy (65-page) order, the California Superior Court in Los Angeles has issued an extremely important decision upholding the legitimacy of bank-model online lending by denying a motion for preliminary injunction filed by the California Department of Financial Protection and Innovation (DFPI) that sought to force fintech Opportunity Financial LLC (OppFi) to stop facilitating loans to California borrowers from its partner FinWise Bank at interest rates above the interest rate cap (generally 36% plus the Federal Funds Rate) imposed by the California Financing Law (CFL).… Continue Reading

Earlier this month, in Fama v. Opportunity Financial LLC, a Magistrate Judge of the federal district court for the Western District of Washington held that the arbitration provision in OppFi’s installment loan agreement is enforceable and rejected the plaintiff’s contentions that the provision is substantively and procedurally unconscionable. This is the third federal district court decision—out of four putative class actions filed to date against OppFi by the same plaintiff’s counsel stating the same claims—to compel arbitration of the named plaintiff’s individual claims.… Continue Reading