Legal Briefs

Online Loan Middleman Just As Culpable As the Lenders, Federal Court Rules

November 21, 2016
Article by:

law and order

A CFPB lawsuit against a payday loan lead generator survived dismissal last week, despite the US Court in the Central District of California acknowledging the company’s role as a “middle man” in the lending process. T3Leads and several people connected to the company are alleged to have deceived consumers, in part such that “they allowed […]

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CFPB Rebuts its Unconstitutionality

October 21, 2016
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Senator Warren, President Obama, and CFPB Director Cordray

Above, Senator Warren, President Obama, and CFPB Director Cordray on July 18, 2011 The CFPB does not agree with the D.C. Circuit’s ruling that its leadership structure is unconstitutional, according to a reply filed in a separate case in the District of North Dakota. Believing itself constitutionally exempt from oversight by the President of the […]

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Embezzler Used Funds to Pay Lending Club Loan

August 14, 2016
Article by:

in handcuffs

Brian T. Cisek pled guilty last week to charges of embezzlement and theft of union funds. A postal worker employee and chairman of the Muscular Dystrophy Association Charity Committee operated through the postal union, Cisek embezzled approximately $9,000 from the charity between January 2013 and September 2014. According to the plea agreement, Cisek at one […]

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Madden v Midland Won’t Be Heard By The US Supreme Court

June 27, 2016
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U.S. Supreme Court

The US Supreme Court has decided not to hear the case of Saliha Madden v Midland Funding. This was to be expected after US Solicitor General Donald Verrilli filed a devastating brief last month on behalf of the United States government that argued the US Court of Appeals for the Second Circuit was incorrect in […]

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Merchant Cash Advance Definitely NOT a Loan, New York Judge Rules

June 11, 2016
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Purchases of Future Receivables are Not Loans

A New York Supreme Court Justice ruled that a purchase of future receivables is not a loan. And it’s not even close, according to a decision and order by The Honorable Jerome C. Murphy in Platinum Rapid Funding Group Ltd v. VIP Limousine Services, Inc. and Charles Cotton. As a background, the corporate defendant agreed […]

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Class Action Against Merchant Cash Advance Company Fails

May 30, 2016
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class action lawsuit

A lawsuit filed against a Fintech company last October had a familiar ring to it, predatory lending. In the Philadelphia Court of Common Pleas, plaintiff Korea Week Inc. sought to make their case against defendant H Capital a class action. The suit, which listed seventeen causes of action, raised eyebrows initially because of who the […]

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WebBank Alleged to be “Sham Pass Through Bank” in New Lending Club Usury Class Action

April 15, 2016
Article by:

Lending Club IPO

A new class action lawsuit filed on April 6th alleges that Lending Club and WebBank among others, violated state usury laws, consumer protection laws and the Racketeer Influenced Corrupt Organizations Act (“RICO”). Plaintiff Ronald Bethune, a New York resident, is arguing that his 29.97% APR loan through Lending Club violated the state’s 16% interest cap. […]

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Plot Twist: Obama Administration to Comment on Madden v Midland

March 22, 2016
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Donald Verrilli Solicitor General

Donald Verrilli, Solicitor General The U.S. Supreme Court wants to know what the Obama administration thinks of the Madden v Midland case. The potential impact of Madden v Midland on marketplace lending was finally starting to fade away until the U.S. Supreme Court made an unexpected move yesterday. “The Solicitor General is invited to file […]

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Ohio Considers Regulation of Confessions of Judgment

March 20, 2016

judgment

In a commercial lending context, courts and legislatures have generally assumed that the parties to the agreement have relatively equal bargaining power. Because of this understanding – that a business borrower is more sophisticated than a consumer borrower – regulation has been more “hands off” with regard to the terms commercial loans may contain. One […]

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Lending Club Class Action Lawsuit Predicated on Madden v Midland Risk

March 2, 2016
Article by:

court ruling

UPDATE: This case is unrelated to another class action filed against Lending Club on April 6th Lending Club is the latest publicly traded online lender to get hit by a shareholder class action lawsuit (OnDeck was first). Filed in the Superior Court of the State of California, plaintiff alleges in the complaint that Lending Club […]

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