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In a motion for a preliminary injunction and accompanying memorandum of points and authorities, the California Department of Financial Protection and Innovation (DFPI) is asking a California state court to order 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

Opportunity Financial LLC (OppFi) has filed a cross-complaint against the Commissioner of California’s Department of Financial Protection and Innovation (DFPI), asserting that the DFPI’s reliance on the so-called “true lender doctrine” in order to subject OppFi to interest rate limitations under the California’s Financing Law (CFL) constitutes adoption and enforcement of an “underground regulation”, which is impermissible under California’s Administrative Procedure Act (APA). … Continue Reading

We have recently focused on the DFPI’s expanded authorities under California Consumer Protection Law, the Debt Collection Licensing Act, and the Student Borrower Bill of Rights. In addition to these blockbuster bills, this legislative session included a short bill impacting the DFPI’s enforcement authority under the California Financing Law (“CFL”), which has also been signed into law by Governor Newsom.… Continue Reading

On the last day of California’s 2019 legislative session, by a vote of 61 to 8, the California State Assembly overwhelmingly passed Assembly Bill 539, the Fair Access to Credit Act. Governor Newsom has until October 13th to sign or veto the bill.

As we’ve previously covered, AB 539 makes significant amendments to the California Financing Law.… Continue Reading

There was movement last week on two California bills that we have been tracking closely and which could substantially alter the lending and brokering landscape under the California Financing Law (“CFL”).

On July 9th, AB-539, which proposes to cap interest rates at 36% plus the federal funds rate on CFL loans of $2,500 to $10,000, passed the Senate Committee on Judiciary and was sent to the Appropriations Committee where we believe the bill will be heard around the end of August.… Continue Reading

A bill introduced last week in the California State Assembly could change the consumer lending landscape in California considerably. The bill, AB 539, would change several aspects of the California Financing Law (CFL), including setting new interest rate caps, imposing new rules governing loan duration, and prohibiting prepayment penalties. Additionally, AB 539 would change the CFL to make clear that a loan’s rate cannot be used as the sole factor in determining whether a loan is unconscionable.… Continue Reading