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Orrick, Herrington & Sutcliffe LLP

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

Orrick, Herrington & Sutcliffe LLP on

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

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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

Troutman Pepper Locke

Texas Introduces Legislation to Regulate Sales-Based Commercial Financing

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Last month, the Texas legislature introduced two companion bills, S.B. No. 2677 and H.B. No. 700, to regulate sales-based commercial financing. For purposes of the proposed legislation, sales-based financing is a transaction...more

Orrick, Herrington & Sutcliffe LLP

Massachusetts’ Attorney General settles with lender for alleged usury claims

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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

Allen Matkins

Judge Rules That A Front For Mexican Cartel Had The Capacity To Protect Its Own Interests

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California Corporations Code Section 25118(b) provides an exemption from the state's usury limitations for loans.  The exemption is subject to several conditions.  One condition is the existence of either a preexisting...more

King & Spalding

Ninth Circuit Addresses Issue of First Impression Concerning the Usury Defense Under California Law

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On May 25, 2023, the U.S. Court of Appeals for the Ninth Circuit, in a two-to-one split decision, held that an exemption to California’s usury laws for certain “aggregate” loan amounts applies only to indebtedness of a single...more

Troutman Pepper Locke

DC OAG Resolves Alleged Usury and Deceptive Acts Violations With Community Lending Platform

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On May 10, SoLo Funds, Inc. (Solo), one of the largest community lending platforms in the United States, entered into a settlement with the District of Columbia attorney general (OAG). The settlement resolves claims that the...more

Patterson Belknap Webb & Tyler LLP

When is a Working Capital Agreement a Loan? It Depends on Your Claim

Patterson Belknap Webb & Tyler LLP on

Suppose you’ve entered into a financial arrangement that resembles a lending agreement, but it is not formally designated as such, and you think you’re paying too much....more

Troutman Pepper Locke

New York Case Is a Win for the Merchant Cash Advance Industry

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Providers of cash advances repaid by sales of future receivables in New York can have greater confidence that these advances are not loans and are not subject to usury laws. On March 16, the Supreme Court of New York,...more

Orrick, Herrington & Sutcliffe LLP

Class Action Against Lending Club and WebBank Headed to Defeat

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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

Davis Wright Tremaine LLP

Increased Risk for Buyers of Credit Card Loans

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Third party debt buyers may face increased threat of state-law class action lawsuits after a recent Second Circuit ruling prohibiting such debt buyers from invoking federal preemption defenses under the National Bank Act to...more

Troutman Pepper

Valid at Inception Rule Shot Down by the Second Circuit

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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

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