California Department of Business Oversight Investigates Auto Title Lender For Possible Usury

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GoodwinOn 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 relationship with an out-of-state bank.

In 2020, the Company allegedly stopped making state-licensed auto loans in California and instead partnered with a Utah-chartered bank that originated the loans for the company to service.  On September 3, the DBO served a subpoena on the company regarding its partnership with the Utah bank in order to investigate whether these new loans should be subject to California’s usury laws.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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