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
Kraninger testifies at House hearing; final payday rule expected in April
On February 6, CFPB Director Kathy Kraninger testified at a House Financial Services Committee hearing on the CFPB’s Semi-Annual Report to Congress. (Covered by InfoBytes here .) The hearing covered the semi-annual report to Congress on the Bureau’s work from April 1, 2019, through September 30,...
InfoBytesColorado announces roadmap to cannabis banking
On February 3, the Colorado governor announced plans to create a regulatory landscape to provide guidance and clarity for state-chartered financial services industries that serve, or wish serve, legal cannabis-related businesses. The Roadmap to Cannabis Banking & Financial Services —primarily...
InfoBytesMassachusetts AG reaches $1.25 million settlement with online lender
On January 21, the Massachusetts attorney general announced a $1.25 million settlement with an online marketplace lender to resolve allegations that it violated the state’s Small Loan Statute by facilitating the origination of loans with excessive interest rates to Massachusetts borrowers...
InfoBytesRepresentatives hold hearing on “rent-a-bank” schemes
On February 5, the House Financial Services Committee held a hearing titled “Rent-A-Bank Schemes and New Debt Traps: Assessing Efforts to Evade State Consumer Protections and Interest Rate Caps” to discuss policies relating to state interest rate caps and permissible interest rates on small dollar...
InfoBytesCFPB issues semi-annual report to Congress
On February 3, the CFPB issued its semi-annual report to Congress covering the Bureau’s work from April 1, 2019, through September 30, 2019. The report, which is required by the Dodd-Frank Act, addresses, among other things, problems faced by consumers with regard to consumer financial products or...
InfoBytesPoint-of-sale finance company enters into consent order with California DBO
On January 16, the California Department of Business Oversight (DBO) and a point-of-sale finance company entered into a consent order to resolve the DBO’s allegations that the company had made loans without a license to California consumers. According to the order, the company applied for a license...
InfoBytesIllinois AG sues credit repair companies for deceptive practices
On January 13, the Illinois attorney general announced that he filed two separate suits in the Circuit Court of Cook County against two credit repair companies and three individuals who allegedly engaged in deceptive and fraudulent practices when promoting credit repair services to consumers and...
InfoBytesDistrict Court settles payday lending suit against investment firm in rent-a-tribe scheme
On December 31, the U.S. District Court for the Eastern District of Pennsylvania entered an order signing off on a settlement agreement between the state attorney general and an investment firm and its affiliates (the defendants) connected to a lender accused of using Native American tribes to...
InfoBytes$24 million settlement proposed in FCRA class action against credit reporting agency
On December 31, a credit reporting agency (agency) and a class of consumers whose payday loan servicer collapsed jointly filed a proposed $24 million settlement agreement for approval by the U.S. District Court for the Central District of California (also, see the memorandum in support here ). The...
InfoBytesCFPB publishes fall 2019 rulemaking agenda
On November 20, the Office of Information and Regulatory Affairs released the CFPB’s fall 2019 rulemaking agenda . According to a Bureau announcement , the information released represents regulatory matters it “reasonably anticipates having under consideration during the period from October 1, 2019...
InfoBytes
Our Alternative Finance Team
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Recent Blog Posts
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February 11, 2020
Kraninger testifies at House hearing; final payday rule expected in April
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February 11, 2020
Colorado announces roadmap to cannabis banking
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February 7, 2020
Massachusetts AG reaches $1.25 million settlement with online lender
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February 7, 2020
Representatives hold hearing on “rent-a-bank” schemes
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February 5, 2020
CFPB issues semi-annual report to Congress