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 company’s lending practices violated D.C. usury law and constituted unfair, deceptive, and/or abusive acts under the D.C. Consumer Protection Procedures Act.
As discussed here, on December 7, 2022, the Consumer Financial Protection Bureau (CFPB or Bureau) made a preliminary conclusion that a New York commercial financing law was not preempted by the Truth in Lending Act (TILA). The Bureau indicated it was also considering whether to make a preemption determination regarding similar state laws in California, Utah, and Virginia. On January 20, 2023, California Attorney General Rob Bonta submitted a letter to the CFPB agreeing with its preliminary determination that California’s Commercial Financing Disclosures Law (CFDL) is not preempted by TILA because the CFDL only applies to commercial financing and not to consumer credit transactions within the scope of TILA. Attorney General Bonta further urged the CFPB to “revisit the Federal Reserve Board’s (Board) vague and overbroad articulation of the TILA preemption standard. The CFPB should articulate a narrower standard that emphasizes that preemption should be limited to situations where it is impossible to comply with both TILA and the state law or where the state law stands as an obstacle to the full purposes TILA, which is to provide consumers with full and meaningful disclosure of credit terms in consumer credit transactions.”
On January 4, Colorado Attorney General Phil Weiser announced that his office had reached settlements with Bellco and Canvas credit unions which will provide $4 million in refunds of unearned guaranteed automobile protection (GAP) premiums to consumers that the credit unions failed to provide previously. In June 2022, we posted here about the five prior settlements reached by the state AG over GAP refunds. Based on the AG’s comments in the press release, we expect continued scrutiny in this area. “When hardworking Coloradans pay for GAP coverage, they deserve to receive what they are owed … My office will continue to hold accountable companies that violate the law and leave Coloradans without the money they were due.”
On December 27, the New Jersey Division of Consumer Affairs (the Division) entered a consent order with Yellowstone Capital LLC (Yellowstone) and several related companies to resolve allegations that, in violation of the New Jersey Consumer Fraud Act, the company engaged in abusive lending practices in connection with Merchant Cash Advances to small business owners (MCAs). Pursuant to the settlement, Yellowstone must forgive all outstanding balances for customers who entered MCAs, which is estimated to be approximately $21.7 million, and pay more than $5.6 million to the Division for purposes that may include, restitution, attorneys’ fees, costs of investigation and litigation and costs of administering restitution, and penalties up to $250,000. The order also imposes additional requirements regarding Yellowstone’s agreements and collections activity discussed below.
On December 8, the U.S. Small Business Administration (SBA) issued a statement regarding its intent to investigate certain participants in the Paycheck Protection Program (PPP) created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.[1] This announcement, just a few months after the U.S. Department of Justice (DOJ) announced its first-ever False Claims
In response to the Fifth Circuit’s ruling in Community Financial Services Association of America, Ltd. v. Consumer Financial Protection Bureau (CFSA) that the Consumer Financial Protection Bureau’s (CFPB) funding mechanism is unconstitutional, West Virginia Attorney General Patrick Morrisey sent a letter on October 24th to the CFPB, calling its continued operations into question and foreshadowing
On May 4, the Connecticut Banking Commissioner issued a temporary order to cease and desist and order to make restitution against lead generator SoLo Funds Inc. (SoLo) for allegedly engaging in unfair, deceptive, and abusive acts and practices (UDAAPs) in violation of the Consumer Financial Protection Act of 2010, as well as for operating in
Stephen Piepgrass and Abbey Thornhill of Troutman Pepper Hamilton Sanders LLP examine the growing movement to give consumers the “right to repair” vehicles themselves alongside the automotive industry’s emerging market for subscription-based features.
In January, President Joe Biden doubled down on his support for the “right to repair” movement, a push to increase consumers’ ability
On March 31, a New York federal court dismissed a proposed securities class-action lawsuit filed against Binance, the world’s largest cryptocurrency exchange. The lawsuit, one of a host of similar actions brought against cryptocurrency exchanges in 2020, was filed by token buyers who purchased cryptocurrency on Binance’s platform.
The plaintiffs asserted that Binance had violated
On April 7, in front of American University’s Kogod School of Business Center for Innovation, Secretary of the Treasury Janet Yellen addressed the Biden administration’s forthcoming legislative approach to digital assets, as we discussed here, as well as the digitization of the American economy, which Yellen assessed through the lens of five lessons she