The Veterans and Consumers Fair Credit Act, which has been introduced in the House (H.R. 5050) and Senate (S. 2833), would impose a 36% national usury limit on most forms of consumer credit. Bill Himpler responds to claims that the rate limit will not reduce credit access for creditworthy consumers and discusses relevant studies, the
usury
Virginia House of Delegates passes bill to establish 36% rate cap for “short-term” and other loans
By Alan S. Kaplinsky on
Posted in Regulatory and Enforcement, Usury
On January 31, 2020, by a vote of 65 to 33, the Virginia House of Delegates passed a bill that would establish a 36% rate cap on certain consumer loans. Since Democrats also hold a majority in the Virginia Senate, the Senate is expected to also pass the bill.
The bill amends Virginia’s general…
This week’s podcast: The Veterans and Consumers Fair Credit Act: a discussion with the bill’s drafter
By Barbara S. Mishkin on
Posted in Usury
The Act, which has been introduced in the House (H.R. 5050) and Senate (S. 2833), would impose a 36% national usury limit on most forms of consumer credit. We are joined by the bill’s drafter, Professor Chris Peterson of the University of Utah S.J. Quinney College of Law, for a discussion of the rationale for…
CFPB announces proposed consent order with companies alleged to have collected loans void under state law
By Alan S. Kaplinsky on
The CFPB announced that it has entered into a proposed consent order with Think Finance and six subsidiaries (collectively, the “Think Entities’) to settle the Bureau’s lawsuit filed in November 2017 that alleged the Think Entities engaged in unfair, deceptive, and abusive acts or practices in connection with their collection of loans that were void…
OCC and FDIC issue proposed rules to undo Madden
By Jeremy T. Rosenblum on
The OCC and FDIC issued proposed rules this week intended to eliminate the uncertainty created by the Second Circuit’s decision in Madden v. Midland Funding. In that decision, the Second Circuit held that a nonbank that purchased charged-off loans from a national bank could not charge the same rate of interest on the loan…
Small business borrowers bring lawsuit alleging lender engaged in “rent-a-charter” scheme to make usurious loans
By Alan S. Kaplinsky & Mark J. Levin on
A group of small businesses and their individual owners have filed a putative class action lawsuit in a New York federal district court against online lender Kabbage, Inc. that alleges Kabbage engaged in a “rent-a-charter” scheme to make loans at interest rates that were usurious under state law.
According to the complaint, Kabbage entered…
Senator Sanders to introduce bill imposing 15% or lower consumer credit interest rate cap
By Alan S. Kaplinsky on
Posted in Regulatory and Enforcement, Usury
Senator Bernie Sanders recently announced that he will be introducing a bill, the “Loan Shark Prevention Act,” that would amend the Truth in Lending Act (15 U.S.C. 1606) (TILA) to establish a “national consumer credit usury rate” that would limit the APR “applicable to any extension of credit” to the lesser of “15 percent…
Parties seek preliminary approval of class action settlement in Madden case
By Alan S. Kaplinsky on
The parties in Madden v. Midland Funding, LLC. have filed a joint motion with the New York federal district court seeking preliminary approval of a class settlement.
The plaintiffs’ class action complaint in Madden alleged that a debt buyer, which had purchased the plaintiffs’ charged-off credit card debt from a national bank, violated…
Delaware enacts law providing financial relief to federal employees impacted by shutdowns
By Glen P. Trudel on
On January 23, Delaware Governor John Carney signed the “Delaware Federal Employees Civil Relief Act” into law. The Act states that its purpose “is to provide for the temporary suspension of judicial and administrative proceedings in Delaware that may adversely affect the civil rights of Federal workers during a shutdown.” The Act provides…
CFPB announces settlement with broker of pension assignments
By Jeremy T. Rosenblum on
The CFPB announced that it has entered a settlement with Mark Corbett to resolve the Bureau’s allegations that Mr. Corbett violated the Consumer Financial Protection Act in connection with his brokering of contracts providing for the assignment of veterans’ pension payments to investors in exchange for lump sum amounts. In its press release announcing the…