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Florida SB 146, a bill that would add a “Predatory loan prevention” section to the Florida Consumer Finance Act has been introduced in the Florida Senate, seeking to curb bank-model lending programs and codify a “true lender” analysis with language similar to legislation enacted in Minnesota and other states within the past three years.… Continue Reading

On November 30, 2023 at 12:30 PM, ET, Ballard Spahr will hold a webinar entitled “Recent Important Developments in Federal Preemption for National and State Banks: What They Mean for Bank and Nonbank Consumer Financial Services Providers” during which this case will be dissected.

In a lengthy (65-page) order, the California Superior Court in Los Angeles has issued an extremely important decision upholding the legitimacy of bank-model online lending by denying a motion for preliminary injunction filed by the California Department of Financial Protection and Innovation (DFPI) that sought to force 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

Earlier this month, in Fama v. Opportunity Financial LLC, a Magistrate Judge of the federal district court for the Western District of Washington held that the arbitration provision in OppFi’s installment loan agreement is enforceable and rejected the plaintiff’s contentions that the provision is substantively and procedurally unconscionable. This is the third federal district court decision—out of four putative class actions filed to date against OppFi by the same plaintiff’s counsel stating the same claims—to compel arbitration of the named plaintiff’s individual claims.… Continue Reading

In January 2023, a federal district court in Texas dismissed Michael v. Opportunity Financial, LLC, a putative class action filed in June 2022 claiming that fintech Opportunity Financial, LLC (OppFi), not its out-of-state, state-chartered bank partners, is the “true lender” on loans with interest rates permitted under the laws of the banks’ home states, but higher than allowed in the plaintiffs’ states. … Continue Reading

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

In its April 2023 Opposition to the California Department of Financial Protection and Innovation (DFPI) motion for preliminary injunction, Opportunity Financial, LLC (OppFi) presents a spirited riposte, drilling down into the DFPI’s fact allegations and legal arguments and asserting “The DFPI is wrong on the law and wrong on the facts.”… Continue Reading

As anticipated, on June 5, 2023, Colorado Governor Jared Polis signed into law Colorado HB23-1229, which will exclude consumer loans made in Colorado from the provisions of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDA) (codified at 12 U.S.C. 1813d), a federal law enacted to create competitive equality with respect to usury laws between state-chartered banks and national banks.… Continue Reading

A fintech peer-to-peer lender has entered into separate consent orders with California, Washington D.C., and Connecticut relating to its practice of requesting tips and donations in connection with the loans offered through its platform. The fintech’s platform offers opportunities for members to act as borrowers or lenders and facilitates loans between its members.… Continue Reading

A Colorado bill (HB23-1229) that would opt out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDA) (codified at 12 U.S.C. 1813d), a federal law enacted to create competitive equality between state-chartered banks and national banks, was approved by both the Colorado Senate and House of Representatives, and will be sent to the Governor shortly.… Continue Reading

Legislation to opt out of a 43-year-old federal law allowing FDIC-insured state banks to “export” interest on interstate loans to the same extent as their national bank counterparts is quietly, but swiftly, working its way through the Colorado legislature.  The bill has passed the House and is expected to be the subject of a hearing next week before a Senate Committee.… Continue Reading