In a recent unpublished memorandum opinion in a putative class action, Carpenter et al. v. Opportunity Financial, LLC, the U.S. Court of Appeals for the Ninth Circuit upheld an arbitration clause in an agreement governing loans serviced by fintech Opportunity Financial, LLC (“OppFi”).  After a de novo review of a California U.S.… Continue Reading

After its passage by the Washington state legislature, Substitute Senate Bill (SSB) 6025, the Washington “predatory loan prevention act”, was approved by Governor Jay Inslee on March 25, 2024, with an effective date of June 6, 2024.

Unlike the original version of this act proposed in Senate Bill 6025 and its identical companion bill, House Bill 1874, SSB 6025 as enacted does not include language expanding the definition of “loan” under the Washington Consumer Loan Act.… Continue Reading

Colorado’s attempt to opt out of interest rate exportation by out-of-state, state-chartered banks ultimately will fail, and will cause irreparable harm in the interim: therefore, enforcement of the opt out should be preliminarily enjoined, according to the plaintiffs’ Motion for Preliminary Injunction (the “Motion”) filed April 2, 2024 in federal district court in Colorado in NAIB et al.Continue Reading

The final rule issued in December 2023 by the Federal Deposit Insurance Corporation (FDIC) amending its regulations at 12 CFR Part 328 (“Final Rule“), which address use of the official FDIC sign and banks’ advertising statements as well as misrepresentations of insured status and misuse of the FDIC’s name or logo, will take effect April 1, 2024, with full compliance required by January 1, 2025.… Continue Reading

On March 25, 2024, three consumer financial services industry trade groups filed a lawsuit asking the federal district court in Colorado to strike down recent Colorado legislation purporting to opt out of a federal law that allows FDIC-insured state-chartered banks to “export” interest rates on interstate loans to the same extent as their national bank counterparts. … Continue Reading

Rhode Island, Minnesota, and Nevada have joined the list of jurisdictions considering proposals to legislatively opt out of federal interest rate preemption established under the federal Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA). Although the legal effect remains unclear, the apparent objective of these proposed laws is to prevent interest rate “exportation” by state-chartered financial institutions.… Continue Reading

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