Consumer Credit Regulation: 2.4.1.3.3 Loan padding and similar manipulations
An allegation of “loan padding”—structuring a loan to increase its size without advancing additional funds to borrowers, thereby increasing lender profit or enabling the creditor to reach more collateral—states a cause of action under a state UDAP statute.410 Similarly, packing a loan with worthless products states a UDAP claim.411 Falsely representing that credit insurance is required is a UDAP violation.412 A lender may commit an unfair and decep