Texas has enacted a law that has the potential to place substantial impediments on sales-based financing providers, including merchant cash advance companies, seeking to operate in Texas. The new Texas law prohibits...more
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
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
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
On May 17, 2024, the Consumer Financial Protection Bureau (“CFPB”) filed suit against an online lending platform, alleging, among other things, the use of dark patterns to induce consumers to pay tips and donations,...more
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
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
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
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
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
On April 1, 2022, the Superior Court of Rhode Island, Providence County, granted partial summary judgment in favor of receivership plaintiffs for statutory damages related to usurious loans in an amount equal to all payments...more
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
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...more
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
On September 3, 2020, the California Department of Business Oversight (“DBO”) announced it had initiated an investigation into an auto title lender for possible violations of California’s state usury limits, through its...more
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
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
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
In Davis v. Oasis Legal Fin. Operating Co., LLC, 18-10526, 2019 WL 4051592 (11th Cir. Aug. 28, 2019), the U.S. Court of Appeals for the Eleventh Circuit (“Eleventh Circuit”) affirmed a decision in the U.S. District Court for...more
In February 2019, the CFPB released the highly anticipated revamp of its Payday Rule, reinforcing its more lenient attitude towards payday lenders. In light of the Bureau’s softer touch, as well as similar developments at the...more
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
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