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Usury

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District Court (Cal.) Says Merchandise Rental Agreements Were Not Disguised Security Agreements Subject to Usury

by Scott J. Hyman |

In Blair v. Rent-A-Center, Inc., No. C 17-02335 WHA, 2019 U.S. Dist. LEXIS 21988 (N.D. Cal. Feb. 11, 2019), Judge Alsup granted summary judgment to a merchandise lessor against a class action plaintiff’s claim that the contracts were disguised security agreements subject to usury.  The allegations were as follows: Defendants Rent-A-Center, Inc. and Rent-A-Center West, Inc. (collectively "RAC") maintained rent-to-own… Read More

California Supreme Court Says Courts Have Authority to Declare Interest Rates on Small Loans Unconscionable

by Scott J. Hyman |

In de la Torre v. CashCall, LLC.,  2018 WL 3827233, at *1 (Cal., 2018), the California Supreme Court found that "nothing in California law prohibits a court from making an inquiry into the nature of a consumer loan agreement of at least $2,500 and the interest rate provided therein."   "As such, just because loans of at least $2,500 are not… Read More

District Court (Pa.) Does End-Around Tribal Sovereign Immunity; Allows Debtor to Sue On-Line Tribal Lender’s Manager Personally For Participation in Tribe-backed On-Line Usurious Loan

by Scott J. Hyman |

In Pennachietti v. Manfield, 2017 WL 6311646, at *1 (E.D.Pa., 2017), Judge Pappert denied a motion to dismiss filed by a manager of a tribal-based lender accused of issuing a usurious loan. Daniel Pennachietti received an allegedly usurious loan through an internet website operated by Sovereign Lending Solutions, LLC, a title lending company established under the tribal law of the Lac… Read More

Court of Appeals (Md.) Confirms that Automobile RISC is Not a “Loan” Subject to Usury

by Scott J. Hyman |

In Dupreez v. GMAC, Inc., 2017 WL 6016592, at *3–4 (Md.App., 2017), the Maryland Court of Appeals confirmed that automobile RISCs are not subject to Maryland's usury statute because they are not "loans". Maryland courts have long held that the term “loan” in the Usury Statute does not extend to installment sales contracts for personalty. This is because under Maryland law,… Read More

Court of Appeal (Cal.) Rejects Rosenthal Act Claim Premised on Legal Challenge to CFL Holder’s Sale of Debt to Unlicensed Entity

by Scott J. Hyman |

In Montgomery v. GCFS, Inc., 2015 WL 3653314, at *1-2 (Cal.App. 1 Dist., 2015), the Court of Appeal affirmed dismissal of a Rosenthal Act claim premised on an alleged prohibition against assignment of a debt from a CFL holder to an unlicensed entity.  I've changed the order of the opinion somewhat for brevity here; but, the facts were as follows: In… Read More

2d Cir. Says NBA Doesn’t Pre-empt New York Usury Laws For Debt Buyer Attempting to Collect Interest Permissible to Credit Card Issuer Under Delaware Law

by Scott J. Hyman |

In Madden v. Midland Funding, LLC, --- F.3d ----, 2015 WL 2435657 (2d Cir. 2015), the Court of Appeals for the Second Circuit found that the NBA did not pre-empt New York state usury claim arising out of debt collector’s attempt to collect the credit card issuer’s interest that was permissible as to the credit card issuer out of Delaware… Read More