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
The Second Circuit’s decision in Madden v. Midland Funding, LLC was announced in 2015. Since that time, there have been a number of cases brought based on the Second Circuit opinion, as well as recent regulatory proposals...more
The CFPB has entered into a proposed settlement with a group of corporate and individual defendants who were alleged to have engaged in unlawful conduct in connection with offering “short-term loans to consumers located in...more
The New York Department of Financial Services (NYDFS) has issued an Online Lending Report that calls for the application of New York usury limits to all online lending and increased regulation of online lenders making loans...more
A recently filed California lawsuit raises the stakes in the ongoing challenge to the “bank origination model.” The lawsuit, Barnabas Clothing, Inc. v. Kabbage, Inc., was filed on March 22, 2018 in Superior Court in Los...more
Over the last two years the financial industry has seen an uptick in litigation and enforcement actions aimed at banks and their non-bank lending partners. These actions have primarily challenged the validity of the bank...more
In our prior Clients & Friends Memo “Who’s My Lender?” published on March 14, 2018, we analyzed two actions brought against marketplace lenders, one against Kabbage Inc. (“Kabbage”) in federal court in Massachusetts and the...more
Over the last several weeks, two notable cases in federal court challenging certain aspects of the business model of marketplace lending companies headed down separate paths. ...more
Richard Moseley Sr., the operator of a group of interrelated payday lenders, was convicted by a federal jury on all criminal counts in an indictment filed by the Department of Justice, including violating the Racketeer...more
In a new lawsuit filed in an Illinois federal district court, the CFPB alleges that four online tribal lenders engaged in unfair, deceptive, and abusive acts or practices in violation of the Consumer Financial Protection Act...more
In the last two weeks, WebBank and Cross River Bank—federally insured banks chartered in Utah and New Jersey, respectively—filed separate federal court actions (WebBank Complaint; Cross River Bank Complaint) against the...more
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
The comment period for the CFPB’s proposed rule on Payday, Title and High-Cost Installment Loans ended Friday, October 7, 2016. The CFPB has its work cut out for it in analyzing and responding to the comments it has...more
The Solicitor General’s brief argues the Second Circuit’s holding was incorrect, but does not recommend a grant of certiorari. On May 24, the U.S. Solicitor General and the Office of the Comptroller of the Currency...more
On August 19, the Attorney General’s Office for the State of Minnesota (Minnesota AG) announced that it had settled a lawsuit against a California-based online lender relating to an alleged “rent-a-tribe” scheme. The...more
For the past year or so, Dechert has been keeping a close eye on the marketplace lending industry and the tension between innovation, which portends the development of an entirely new non-banking financial space, and the...more
In earlier client OnPoints, we have provided a comprehensive review of recent developments in the U.S. affecting the marketplace lending industry, including the potentially far-reaching Madden v. Midland Funding, LLC case...more
Where do marketplace lenders and secondary loan market participants find themselves on the issue of preemption of state usury laws after the June 27 denial of the petition for a writ of certiorari in Madden v. Midland by the...more
The Maryland Court of Appeals, the state's highest court, in CashCall, Inc. et al. v. Maryland Commissioner of Financial Regulation, recently affirmed the judgment of the Court of Special Appeals (MCSA) directing CashCall to...more
On June 27, 2016, the U.S. Supreme Court declined to review a Second Circuit Court of Appeals decision in the case of Madden v. Midland Funding, LLC. The High Court’s decision will allow a consumer class action against...more
Regardless of whether or not Midland’s case is successful at the district court, there are a number of reasons why the Second Circuit’s Madden decision is not as disastrous as some have portrayed it to be. On June 27,...more
In a blow to banks and the marketplace lending industry, on June 27, 2016, the U.S. Supreme Court denied the petition by Midland Funding to hear the case Midland Funding, LLC v. Madden (No. 15-610). That case involves a...more
The U.S. Supreme Court has denied certiorari to review the decision of the U.S. Court of Appeals for the Second Circuit in Madden v. Midland Funding, LLC. As previously reported, Madden involved a putative class action...more
The Supreme Court today denied certiorari in Midland Funding v. Madden. Although the denial leaves the Second Circuit's May 2015 decision in place, it does not signal the Supreme Court's view of the correctness of that ruling...more
On June 6, 2016, the West Virginia Attorney General announced a settlement with a regional online lender over allegations that the lender’s business practices violated West Virginia’s Consumer Credit and Protection Act. The...more