In response to the complaint filed by Opportunity Financial, LLC (OppFi) seeking to block the California Department of Financial Protection and Innovation (DFPI) from applying California usury law to loans made through OppFi’s partnership with FinWise Bank (Bank), the DFPI has filed a cross-complaint seeking to enjoin OppFi from collecting on the loans and to
Usury
Divided Tenth Circuit panel rules national bank’s extended overdraft fee are not “interest” under the NBA
By Ronald K. Vaske on
A divided panel of the U.S. Court of Appeals for the Tenth Circuit has ruled in Walker v. BOKF, National Association that the extended overdraft fees charged by BOKF were not “interest” under the National Bank Act (NBA). The Tenth Circuit’s ruling on what it called “an issue of first impression in this circuit” follows…
OppFi files complaint to block “true lender” challenge by California Department of Financial Protection and Innovation
By Ronald K. Vaske, Glen P. Trudel & Mindy Harris on
Opportunity Financial, LLC (OppFi) has filed a Complaint for Declaratory and Injunctive Relief in a California state court against the California Department of Financial Protection and Innovation (DFPI), seeking to block the DFPI from applying California usury law to loans made through OppFi’s partnership with Fin Wise Bank (Bank), a state-chartered FDIC-insured bank located in…
Bill to impose 36% rate cap passes New Mexico House and Senate
By Ronald K. Vaske & Mindy Harris on
The New Mexico House and Senate have both passed House Bill 132 which would create a 36% annual percentage rate (APR) cap on loans up to $10,000 made under the New Mexico Bank Installment Loan Act of 1959 (BILA) and the New Mexico Small Loan Act (SLA). In an apparent effort to reach non-bank participants…
California federal district court upholds OCC and FDIC “Madden-fix” rules
By Glen P. Trudel, Ronald K. Vaske & Mindy Harris on
A California federal district court judge has rejected challenges to the OCC’s and FDIC’s Madden-fix rules brought in two separate lawsuits by state attorneys general. The OCC rule is codified at 12 C.F.R. Section 7.4001(e) and the FDIC rule is codified at 12 C.F.R. Section 160.110(d). The rules provide that a loan made by…
Third Circuit holds application of PA usury law to auto title loans made to PA residents at out-of-state locations does not violate Commerce Clause
By Burt M. Rublin & Mark J. Levin on
Posted in Litigation and Court Decisions, Usury
The U.S. Court of Appeals for the Third Circuit recently ruled that the application of Pennsylvania usury laws to auto title loans made to Pennsylvania residents who travel outside of Pennsylvania to obtain such loans does not violate the Commerce Clause of the U.S. Constitution. The decision could have significant implications for all providers of…
New York reduces judgment rate on consumer debts to 2%
By Ballard CFS Group on
Posted in State regulation, Usury
On December 31, 2021, New York Governor Hochul signed into law S5724-A which reduces the annual rate of interest on judgments arising out of a consumer debt where the defendant is a natural person from 9% to 2%. The laws take effect 120 days from the Governor’s signature, which is April 30, 2022.
For purposes…
California DFPI announces consent order with auto title loan servicer that was subject of “true Lender” investigation
By Ballard CFS Group on
Last week, the California Department of Financial Protection and Innovation (DFPI) announced that it had entered into a consent order with Wheels Financial Group, LLC d/b/a LoanMart, a California-based company that markets and services automobile title loans. LoanMart was the subject of an investigation launched in September 2020 in which the DFPI (then still named…
Bill reintroduced in House to impose 36% “all-in” rate cap
By John L. Culhane, Jr. on
Posted in Regulatory and Enforcement, Usury
A group of Democratic House members, joined by a Republican House member, has reintroduced a bill (H.R. 5974) that would make consumer credit extended to any consumer subject to the Military Lending Act’s “all-in” 36% rate cap.
The bill provides that 10 U.S.C. Sec. 987(b) applies “to a creditor who extends consumer credit…
Ballard Spahr attorneys complete White Paper on bank-model lending
By Mindy Harris & Ronald K. Vaske on
Ballard Spahr attorneys have now completed a months-long project in updating and expanding a 2017 White Paper addressing bank-model lending—programs involving partnerships between banks (or savings associations) and fintech or other nonbank companies in the interstate delivery of loans.
The new White Paper, which runs 49 pages single-spaced, is designed to serve as a comprehensive…