On September 3, 2020, the California Department of Business Oversight (DBO) announced that it has launched a formal investigation into whether Wheels Financial Group, LLC d/b/a LoanMart, formerly one of California’s largest state-licensed auto title lenders, “is evading California’s newly-enacted interest rate caps through its recent partnership with an out-of-state bank.”  Coupled with the California

Ballard Spahr LLP has submitted a comment letter to the OCC in support of its proposed rule, “National Banks and Federal Savings Associations as Lenders” (the “Proposed Rule”). As detailed in our letter, we applaud the Proposed Rule, which would establish a clear and logical bright line confirming and clarifying that a bank (or

We have previously blogged about the lawsuits filed by the Colorado Attorney General against fintechs Avant and Marlette Funding and their partner banks WebBank and Cross River Bank.   These lawsuits challenged on Madden and “true lender” grounds the interest rates charged under the defendants’ loan programs. The AG has now settled with the defendants and

In an order issued August 12, 2020, the United States District Court for the District of Colorado relied on the OCC’s “Madden fix” rule  to hold that, under Section 27 of the Federal Deposit Insurance Act, 12 U.S.C. § 1831d, a promissory note with an interest rate that was valid when made remains valid

Less than two months after issuing its final “Madden fix” rule, the OCC has now issued a proposed rule to address when a national bank or federal savings association should be considered the “true lender” in the context of a third party relationship.  Comments on the proposal, which was published in today’s Federal

A bipartisan group of five House members introduced a bill (H.R. 4439) last month that is intended to address the so-called “true lender” issue, which creates risk with respect to some loans made by banks with substantial marketing and servicing assistance from nonbank third parties, and then sold shortly after origination. These loans

Two state-chartered banks recently filed complaints for declaratory judgment and injunctive relief against the Administrator of the Uniform Consumer Credit Code for the State of Colorado, Julie Ann Meade.  The complaints were filed in Colorado federal court and seek to permanently enjoin enforcement actions brought by Meade against the banks’ non-bank partners who, according to