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Matthew Verdin

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Matthew Verdin specializes in defending class actions and complex commercial disputes. He has significant experience representing clients in the financial services and technology industries, achieving favorable outcomes in litigation involving consumer protection, trademark, and privacy claims.

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May courts look beyond the face of a loan transaction to identify the “true lender”?  In a lawsuit filed by California’s financial regulator, a California state court recently answered yes, finding that a fact-intensive inquiry into the “substance” of a loan transaction was necessary to determine who the “true lender” is and declining to dismiss a lawsuit. See Opportunity Fin., LLC v. Hewlett, No. 22STCV08163 (Cal. Super. Ct. Sept. 30, 2022).…

Continue Reading California Court Applies “Substance Over Form,” Allows True Lender Claim to Proceed

A bank partnership is the target of yet another “true lender” attack in a new class action filed last week.  Michael v. Opportunity Fin., LLC, No. 1:22-cv-00529 (W.D. Tex. June 1, 2022).  The lawsuit is aimed at the lending partnership between OppFi (a fintech) and FinWise Bank (its bank partner), which was also the target of a recent investigation by California’s banking regulator and another class action earlier this year.  This latest development cements a growing trend of true lender attacks after Congress repealed a regulation on the topic last year, dashing hopes of a uniform and predictable standard to identify the “true lender” in bank partnerships.…

Continue Reading Bank Partnership Attacked (Again) Under True Lender Theory

In the wake of rulings upholding federal regulators’ “valid when made” rules, a new lawsuit serves as a reminder that state regulators and class-action plaintiffs’ lawyers may continue to challenge the bank partnership lending model under the “true lender” doctrine.
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Continue Reading Fintech Lawsuit Highlights True Lender Risk for Bank Partnership Lending Model

Delivering a significant win for the financial services industry, a California federal judge upheld “valid when made” rules promulgated by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) in California v. OCC, No. 4:20-cv-05200 (N.D. Cal. Feb. 8, 2022) and California v. FDIC, No. 4:20-cv-05860 (N.D. Cal. Feb. 8, 2022).  Those rules sought to undo the Second Circuit’s 2015 decision in Madden v. Midland Funding—a decision that class-action plaintiffs’ lawyers and state regulators have invoked to bring lawsuits challenging so-called “rent-a-bank” schemes between banks and third parties.  The rules were finalized in June and July 2020, and established a bright-line rule that the interest rate charged on a bank-made loan may still be charged after the loan is sold to a third party.…

Continue Reading A Closer Look: Federal Court Upholds OCC’s & FDIC’s Valid-When-Made Rules

On June 30, President Biden signed into law a joint resolution to repeal the Office of the Comptroller of the Currency’s (OCC) so-called true lender rule.  The rule was repealed under the Congressional Review Act (CRA), which allows Congress to repeal new federal regulations by passing a joint resolution of disapproval that must be later signed by the president.  Federal regulations repealed under the CRA are treated as if they had never gone into effect.
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Continue Reading Congress Repeals the OCC’s True Lender Rule