Conference track
Practice tool type
Issued:
Description
High-cost lenders are increasingly trying to exploit banks’ preemption rights by laundering their loans through banks to evade state rate caps. “Rent-a-bank” schemes are being used not only by online installment lenders but also auto title lenders, point-of-sale financing offered on tablets in stores, and small business loans that imperil the owner’s home. The legal landscape is messy and evolving rapidly. Federal bank regulators are weighing in with rules of questionable legality to protect rent-a-bank schemes, while state atttorneys general are starting to have success in fighting back. Picking the right cases, defendants and theories is critical. This session will describe what is happening, the status of the law, and doctrines like “Madden,” “valid-when-made” and “true lender.”
