News & Analysis as of

Lenders Interest Rates Usury

Sheppard Mullin Richter & Hampton LLP

Texas Supreme Court Issues New Interpretation of Texas Usury Law

On May 23, the Texas Supreme Court issued an opinion holding that in determining whether a commercial loan is usurious under Texas state law, the “actuarial method” must be employed. This requires the applicable amount of...more

Orrick, Herrington & Sutcliffe LLP

Texas Supreme Court answers Fifth Circuit’s question on loans in ruling

On May 23, the Supreme Court of Texas ruled that the maximum permissible interest on a loan must be calculated using the declining principal balance rather than the initial total principal amount. This decision was in...more

Katten Muchin Rosenman LLP

Maximum Interest Must Be Calculated Using the Actuarial Method Resulting in Lower Interest Charges as Principal Balance Declines

Commercial lenders in Texas should be made aware of the Texas Supreme Court’s new decision in American Pearl Group, LLC v. National Payment Systems, LLC, No. 24-0758. In that case, the Court clarified the “actuarial method”...more

Ballard Spahr LLP

New York AG sues payday lenders MoneyLion and DailyPay

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New York Attorney General Letitia James has sued payday lenders MoneyLion Inc. and DailyPay Inc. in New York state court, alleging that the two companies took advantage of tens of thousands of New Yorkers....more

Orrick, Herrington & Sutcliffe LLP

Massachusetts’ Attorney General settles with lender for alleged usury claims

On May 21, the Massachusetts Attorney General (AG) released an Assurance of Discontinuance against a lender for allegedly violating the state’s Consumer Protection Act (CPA) provision on unfair and deceptive acts and...more

Orrick, Herrington & Sutcliffe LLP

Michigan Supreme Court limits applicability of “usury savings clauses”

On June 23, the Michigan Supreme Court reversed a circuit court’s decision on a case involving Michigan’s “longstanding prohibition on excessive interest rates for certain loans.” The case involved a “usury savings clause,”...more

Orrick, Herrington & Sutcliffe LLP

4th Circuit affirms certification of class action in tribal lending case

On January 24, the U.S. Court of Appeals for the Fourth Circuit concluded that a district court did not abuse its discretion when certifying a class action. The lawsuit alleges an individual who orchestrated an online payday...more

Allen Matkins

Court: OTC Company Has The Capacity To Protect Its Own Interests

Allen Matkins on

Notably, California has a constitutional limitation on interest rates (Cal. Const. Art. XV, Section 1).   Section 25118 exempts certain evidences of indebtedness that meet specified conditions.  One of these conditions is...more

Miller Canfield

Commitment Fees Might Constitute Interest Under Michigan Law

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Lenders often include fees in loan transactions in addition to an interest rate. Typically such fees are not considered interest, as they compensate the lender for various services or commitments provided under the loan...more

Mitchell, Williams, Selig, Gates & Woodyard,...

Late Penalties on Loan Payments in Arkansas – What's the Rule?

A frequently asked question in the lending community is whether there is an established amount regarding the maximum late fee that can be charged for a late payment made on a loan in Arkansas. Unfortunately, the answer to...more

Carlton Fields

Clarity on Application of California Usury Law: Insurers Not Subject to Compound Interest Limitations

Carlton Fields on

The California Supreme Court recently handed Northwestern Mutual Life Insurance Co. a decisive victory in a putative class action challenging the insurer’s assessment of compound interest on policy loans, holding that...more

Allen Matkins

Supreme Court: 1934 Amendment Repeals 1918 Limitation On Compound Interest

Allen Matkins on

The same year that the Great War ended, the voters of California approved an initiative measure governing allowable interest rates. This initiative remains uncodified but West Publisher designates these statutes as Civil Code...more

Orrick, Herrington & Sutcliffe LLP

Class Action Against Lending Club and WebBank Headed to Defeat

On Monday, a federal district court in the Southern District of New York granted a motion to compel arbitration in Bethune v. Lending Club Corporation, et al., a closely watched putative class action raising important issues...more

Orrick, Herrington & Sutcliffe LLP

Rejecting "True Lender" Arguments, California District Court Dismisses Claims Against Student Loan Servicers

This past Thursday, September 22, a federal district court in the Central District of California dismissed an action raising usury claims against several student loan servicers, rejecting the plaintiffs' arguments based on...more

Goodwin

Online Fast Cash Lenders to Pay $9 Million to Settle Claims of Illegal Lending to North Carolina Consumers

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On June 21, 2016, the North Carolina Attorney General announced that two online fast cash lenders have agreed to pay more than $9 million in refunds for allegedly illegal loans issued to North Carolina consumers. The...more

Goodwin

Colorado Attorney General Announces Lenders Will Return $8 Million to Consumers over Alleged Usurious Loans

Goodwin on

On June 8, 2016, the Colorado Attorney General announced that several national lenders were ordered to pay approximately $8 million in restitution to Colorado consumers over alleged usurious loans, which violated Colorado’s...more

Troutman Pepper

Valid at Inception Rule Shot Down by the Second Circuit

Troutman Pepper on

Marketplace lenders and investors that purchase interests in loans originated by banks should pay close attention as it could spawn a host of class action lawsuits if left standing. In a controversial opinion decided on...more

Ballard Spahr LLP

New York Attorney General Announces Settlement with Large Payday Lender

Ballard Spahr LLP on

On January 24, 2014, New York Attorney General Eric Schneiderman announced that a settlement had been reached with Western Sky Financial, LLC, Cash Call, Inc., WS Funding, LLC, and their principals for alleged violations of...more

Ballard Spahr LLP

Former Colorado regulator and consumer advocate Laura Udis to join CFPB as manager for payday lending program

Ballard Spahr LLP on

We have learned that, starting Monday, Laura Udis will join the CFPB as the Payday and Small Dollar Lending Program Manager in Research, Markets and Regulations. Ms. Udis comes to the CFPB from the Consumer Federation of...more

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