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
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
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
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
On March 11, a class action lawsuit was filed in the Philadelphia County Court of Common Pleas against a financial technology company offering cash advances up to $200 through a lending app. The lawsuit alleged the company...more
Oregon may become the latest state attempting to stop out-of-state banks from “exporting” home-state interest rates on loans made to Oregon consumers. Like similar legislation adopted by Colorado in 2023, House Bill 2561...more
In the current world, where trade ties are vital in strengthening the economy of a country, it is often necessary to enter into legal contracts with various entities around the world. It is also necessary that these contracts...more
In 2019, LGH Investments, LLC loaned $100,000 to Social Life Network, Inc., a software licensing company, in exchange for a convertible note, common stock, and stock warrant for 412,500 shares at a strike price of $0.20. The...more
On Tuesday, November 26, the Minnesota Attorney General’s office (AG) announced it filed a consent order to resolve allegations that online lenders were charging interest on loans in excess of the amounts prescribed under...more
On September 20, 13 states and Washington, D.C. joined Colorado in its appeal asking the Tenth Circuit to uphold a state law imposing more restrictive interest rate caps on loans from out-of-state banks to residents, arguing...more
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
A bill before the New York State Assembly would, if passed, have major implications for a variety of financing transactions in the Empire State. Titled the End Loan Sharking Act, Assembly Bill 9585 would subject a variety of...more
A California state court recently denied a preliminary injunction sought by the California Department of Financial Protection and Innovation (the DFPI) in its long-running litigation against Opportunity Financial (OppFi)...more
On October 30, the Minnesota Attorney General’s office filed a complaint against a Montana tribal economic development entity claiming that the entity’s lending subsidiaries violated state and federal usury laws through...more
On September 5, 2023, a New York state court invalidated a loan agreement’s choice of law provision, ruling that the loan agreement was void and depriving the lender of both principal and interest payments. The lender, Samson...more
Every day, attorneys act as advisors to parties negotiating and drafting contracts. Among those terms often left to the lawyers are choice-of-law provisions. Which state’s law governs a dispute, in theory, should not...more
By: Jeffrey M. Haber In our last article (here), we examined a choice-of-law provision that, if applied, would violate New York public policy concerning usurious loans. In that case, Virginia law, which does not prohibit...more
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
In Soaring Pine Capital Real Estate & Debt Fund II, LLC v. Park Street Group Realty Services, LLC, the Michigan Supreme Court considered whether a court may enforce a usury savings clause in a mortgage agreement. A usury...more
Usury is the unlawful lending of money at unreasonably high rates of interest. So, what is unreasonable? And what happens if your loan goes beyond that amount?...more
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...more
California limits the amount of interest that may be charged on loans and forbearances. While that is the general rule, there are numerous statutory exemptions. One of those exemptions can be found in California...more
Does California's usury limitations constitute a "strong public policy"? Seemingly, that question was decided over a half-century ago by the First District Court of Appeal in Ury v. Jewelers Acceptance Corp., 227 Cal. App....more
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
In December, the State of Iowa and the Iowa Division of Banking entered into an Assurance of Discontinuance (“AOD”) with Transportation Alliance Bank, Inc. (the “Bank”) settling claims that the Bank charged usurious rates of...more