On June 5, 2024, Minnesota Bankers Association and Lake Central Bank (“Plaintiffs”), filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit to appeal the Minnesota federal district court’s April 9, 2024 dismissal of the Plaintiffs’ lawsuit against the Federal Deposit Insurance Corporation (FDIC) challenging the FDIC’s guidance on non-sufficient funds (NSF) fees.… Continue Reading
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Minnesota Omnibus Bill includes consumer loan law amendments for all-in APR cap and anti-evasion, new money transmitter laws, and more
By Kristen E. Larson on
Minnesota recently enacted the Commerce Omnibus Finance Bill, which includes amendments to several provisions of Minnesota law related to consumer loans and financial institutions.
Interest Rate Caps on Consumer Small Loans and Short-Term Loans
Minnesota laws related to consumer small loans and consumer short-term loans (as those terms are defined under Minnesota law) are amended to define the annual percentage rate (APR) for the covered loans to be an all-in rate including all fees and charges, as follows:
“Annual percentage rate” means a measure of the cost of credit, expressed as a yearly rate, that relates the amount and timing of value received by the consumer to the amount and timing of payments made. … Continue Reading
FTC announces settlements with student debt relief company and company that financed fees
By Barbara S. Mishkin on
The FTC announced settlements of two lawsuits filed in a California federal district court alleging similar violations of the FTC Act, the Telemarketing Sales Rule (TSR), and the Truth in Lending Act by providers of student debt relief services, their principals, and a Minnesota-based company that provided financing to customers of the providers involved in both complaints. … Continue Reading
Minnesota federal court decision is warning to lead generators
By Ronald K. Vaske on
A Minnesota federal district court recently ruled that lead generators for a payday lender could be liable for punitive damages in a class action filed on behalf of all Minnesota residents who used the lender’s website to obtain a payday loan during a specified time period. An important takeaway from the decision is that a company receiving a letter from a regulator or state attorney general that asserts the company’s conduct violates or may violate state law should consult with outside counsel as to the applicability of such law and whether a response is required or would be beneficial.… Continue Reading
Minnesota AG files lawsuit against pension advance companies
By Barbara S. Mishkin on
The Minnesota Attorney General announced that she has filed a lawsuit in state court against two pension advance companies.
According to the AG’s press release, the companies often solicited borrowers through their own websites or websites of “lead generators” who marketed “pension loans” or “loans that can fit your needs.” … Continue Reading
Minnesota Supreme Court rules schools needed lending license to make student loans
By John L. Culhane, Jr. on
The Minnesota Supreme Court recently ruled that two for-profit postsecondary education schools had charged usurious interest rates on student loans and could not charge rates greater than 8% without obtaining a lending license.
Minnesota’s general usury law caps interest rates at 8% for written contracts but allows a lender to charge up to 18% on a “consumer credit sale pursuant to an open end credit plan.” … Continue Reading