On November 16, 2017, the CFPB filed suit in Montana federal court against Think Finance for activities connected to its tribal-affiliated internet lending business.  Think Finance worked with lenders owned by Native American tribes to offer small-dollar loans to consumers that the Bureau alleges are void under state law.  This suit came on the same day that the upcoming departure of Director Richard Cordray became public, an indication perhaps that Bureau leadership may believe that the aggressive theories of the case (discussed below) would not be pursued under new leadership.  Think Finance declared bankruptcy in Texas federal court three weeks ago, so the CFPB filed may have filed suit to ensure that it could be a creditor.  As indicated by the recent bankruptcy action, Think Finance may not have the resources to defend itself in this action.

Continue Reading CFPB Sues Tribal-Affiliated Online Loan Servicer for Collecting on Allegedly Void Loans

On September 14, 2017, the Consumer Financial Protection Bureau (the “CFPB” or the “Bureau”) issued a no-action letter for the first time, after having finalized its no-action letter policy in February 2016.  The Bureau’s letter grants a request by Upstart Network, Inc. (“Upstart”), an online lender that uses both traditional and non-traditional credit scoring data, regarding the application of the Equal Credit Opportunity Act and Regulation B to Upstart’s automated model for underwriting applicants for unsecured non-revolving credit.  In its press release accompanying the letter, the Bureau explicitly referenced its ongoing interest in learning more about the benefits and risks of using alternative data in credit scoring, an issue the Bureau raised in February 2017.

Continue Reading CFPB Issues its First No-Action Letter