Tag: lending

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10 Impactful Provisions of the Lummis-Gillibrand Bill
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Potential Major Change for U.S. Prepaid Products: Paypal vs CFPB Court Vacates Two Significant Restrictions in CFPB’s Prepaid Account Rule
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Who bears the risk? Federal Court holds that a purchaser of unsecured consumer loans is the “true lender”

10 Impactful Provisions of the Lummis-Gillibrand Bill

By Andrew Hinkes, Eden Rohrer, and Judie Rinearson

The “Lummis-Gillibrand Responsible Financial Innovation Act,” announced this morning, lays out a bold agenda for legal reform across multiple regulatory regimes aimed at clarifying legal requirements for regulated entities to issue, trade, and provide services related to certain digital assets. Although a point by point summary of the 69 page bill is beyond the scope of this post, here’s a brief summary of 10 impactful provisions from the Bill:

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Who bears the risk? Federal Court holds that a purchaser of unsecured consumer loans is the “true lender”

By Irene C. Freidel and David D. Christensen

A California federal court has held that the purchaser of consumer loans is the “true lender” and thus subject to state usury laws, even though a separate entity funded and closed the loans in its own name. The recent decision, however, is another reminder that US state and federal regulators, as well as plaintiffs’ attorneys, may be able to pierce these partnerships where the financial institution funding and closing the loan does not bear substantial risk on those loans.

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