Alternative Finance
Practice Overview
Alternative finance addresses financing activity that takes place outside of the traditional banking system, such as payday loans, auto title loans, check cashing services, and often through the numerous emerging fintech companies. Buckley has long-standing experience with such products, including involvement from the inception of retail payday lending — representing the first movers in that space in litigation and regulatory matters even before the enactment of specific laws addressing payday lending. Our attorneys navigate clients and investors through the challenges of payday loans, auto title installment loans, deposit advance, and similar products. We work with our clients to address and adapt to changing regulatory expectations and federal and state legislative developments.
Our firm provides legal counsel regarding supervisory and enforcement matters with the Consumer Financial Protection Bureau (CFPB) and state banking departments. We also perform transactional due diligence of alternative finance for investors and other counterparties. As needed, we are effective advocates who defend alternative finance providers and their officers and directors in class actions and governmental enforcement actions.
Representative work includes:
- Represent payday lenders in CFPB supervisory and enforcement matters relating to a variety of business models (single-state license/choice-of-law, multiple-state license, online, tribal, and offshore)
- Advise payday lenders regarding state regulatory inquiries regarding possible violations of state law
- Perform acquisition due diligence of alternative finance companies offering payday loans, installment loans, title loans, gold buying, and check cashing services
- Defended a payday lender in a class action alleging unfair and deceptive trade practices and usury violations
- Represented a payday lender in a Federal Trade Commission (FTC) investigation regarding privacy and information security issues
Articles
"Equipment finance: Understanding licensing obligations" by Kathryn L. Ryan, Moorari K. Shah, and Frida Alim (Equipment Leasing & Finance Magazine)
Licensing Considerations, Generally The applicability of state licensing laws may depend on multiple factors, including transaction structures, business entity types and whether the activities are appropriately classified as “commercial” or another type of non-consumer transaction. Although the...
Articles
News & Blogs
California enacts installment loan rate cap
On October 10, the California governor signed AB 539 , known as the “Fair Access to Credit Act,” which amends the California Financing Law (CFL) to limit the rate of interest on certain installment loans. Specifically, for installment loans with a principal amount between $2,500 and $10,000,...
InfoBytesCSBS seeks comments on money services businesses model law
On October 1, the Conference of State Bank Supervisors (CSBS) issued a request for comments on its Draft Model Law Language for money services businesses (MSBs). According to CSBS, state regulation of MSBs is a primary part of Vision 2020—a state regulator initiative to modernize the regulation of...
InfoBytesCFPB and South Carolina take action against loan broker for veteran pension loans
On October 1, the CFPB and the South Carolina Department of Consumer Affairs filed an action in the U.S. District Court for the District of South Carolina against two companies and their owner, alleging that the defendants violated the Consumer Financial Protection Act (CFPA) and the South Carolina...
InfoBytesNCUA approves additional payday loan alternative
On September 19, the NCUA announced the approval of a final rule creating a new payday alternative loan product (PAL II). As previously covered by InfoBytes , in June 2018, NCUA proposed the PAL II as an additional offering to the current payday alternative loan product (PAL I), which has been...
InfoBytesNew York says creditors prohibited from obtaining confessions of judgments against out-of-state borrowers
On August 30, the New York governor signed S 6395 , which prohibits creditors from obtaining confessions of judgments through the New York court system against individuals and businesses located outside of the state in order to seize borrower assets. According to a press release issued by Governor...
InfoBytes11th Circuit: Payday lenders’ agreements unenforceable under Georgia policy
On August 28, the U.S. Court of Appeals for the 11th Circuit held that a district court did not err when it denied a group of lenders’ motion to dismiss class action claims alleging that their loan agreements violated Georgia’s Payday Lending Act (PLA), the Georgia Industrial Loan Act (GILA), and...
InfoBytesIllinois updates Consumer Installment Loan Act and Payday Loan Reform Act
On August 23, the Illinois governor signed SB 1758 , which amends the state’s Consumer Installment Loan Act and the Payday Loan Reform Act. Generally, payday loans must be repayable in substantially equal and consecutive installments. The amendment clarifies that a “‘substantially equal installment...
InfoBytesWaters and 101 representatives urge CFPB to reconsider payday compliance delay
On August 23, House Financial Services Committee Chair, Maxine Waters (D-Calif) and 101 other members of Congress wrote to CFPB Director Kathy Kraninger to express concern over the Bureau’s recent amendment of and delay to certain ability-to-repay provisions of the agency’s 2017 final rule covering...
InfoBytesNYDFS announces multistate investigation of payroll advance industry
On August 6, NYDFS announced it is leading a multistate investigation into the payroll advance industry based on allegations of unlawful online lending. According to NYDFS, the investigation will focus on whether companies are violating state banking laws, including usury limits, licensing laws,...
InfoBytesDelaware authorizes participation in multi-state automated licensing system
On June 27, the Delaware Governor signed HB 199 , which, among other provisions, authorizes the Delaware State Bank Commissioner to participate in a multi-state automated licensing system that will assist in the facilitation of the application and licensing process for mortgage loan brokers,...
InfoBytes
Our Alternative Finance Team
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Recent Blog Posts
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October 16, 2019
California enacts installment loan rate cap
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October 4, 2019
CSBS seeks comments on money services businesses model law
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October 3, 2019
CFPB and South Carolina take action against loan broker for veteran pension loans
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September 25, 2019
NCUA approves additional payday loan alternative
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September 5, 2019
New York says creditors prohibited from obtaining confessions of judgments against out-of-state borrowers