The company falsely advertises its cash advances as requiring no collateral or personal guarantee, according to a lawsuit filed by the Federal Trade Commission.
The legislation proposed by Rep. Nydia M. Velázquez, D-N.Y., goes further than recent state efforts to require better disclosures for high-cost lenders, but it would face an uphill battle in the GOP-controlled Senate.
Acting Comptroller of the Currency Brian Brooks said the agency plans to issue new assessment procedures within weeks as a follow-up to recent Community Reinvestment Act reforms. He also touched on the “true lender” issue and why the agency is considering a narrow-purpose payments charter.
The complaint filed by New York, California and Illinois argues that the regulation, issued in response to the 2015 Madden decision, undermines state laws intended to protect consumers.
Two trade organizations and a consumer group urged lawmakers to establish a three-year moratorium to block the charter bids of companies that they said were attempting to skirt regulatory requirements.
Similar to a law passed two years ago in California, legislation headed to the New York governor’s desk would require fintech and other nonbank lenders to uniformly disclose total cost of capital, APR and other metrics to potential borrowers.
The consumer agency alleges Townstone Financial's CEO and president made statements on a radio show discouraging applicants living in Black neighborhoods from seeking home loans.
A top Federal Reserve official is issuing a warning about fast-growing and largely unregulated shadow lenders: They were a big factor in why central banks had to save markets earlier this year, and much more needs to be done to assess the risks posed by the sector.
If it’s approved, the charter is expected to lower the fintech’s cost of funds and allow for more product offerings. It comes nearly three years after SoFi pulled the plug on an earlier effort to open an industrial bank.
