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
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Litigation Between FinTech Companies Follows Class Action Over Cryptocurrency Theft
This past week, co-defendants in a class action related to the theft of cryptocurrency engaged in their own lawsuit over alleged security failures. IRA Financial Trust, a retirement account provider offering crypto-assets, sued class action co-defendant Gemini Trust Company, LLC,
Bank Partnership Attacked (Again) Under True Lender Theory
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
Companies Increasingly Facing Class Actions Connected to Cryptocurrency Theft
A recent class action refiled in federal court against Shopify highlights a growing trend of lawsuits against companies related to the theft of cryptocurrency, particularly as a result of internal company threats. See Forsberg et al v. Shopify, Inc. et
Federal Deposit Insurance Corporation Issues Proposed Statement on Principles of Climate-Related Financial Risk Management for Large Financial Institutions
On March 30, 2022, the Federal Deposit Insurance Corporation (“FDIC”) released a proposed policy statement related to sound management of exposures to climate-related financial risks (the “Proposal”). The Proposal is targeted at FDIC-supervised financial institutions with more than $100 billion
Fintech Lawsuit Highlights True Lender Risk for Bank Partnership Lending Model
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.
A Closer Look: Federal Court Upholds OCC’s & FDIC’s Valid-When-Made Rules
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
OCC Issues Draft Principles for Climate Risk Management
On December 16, 2021, the Office of the Comptroller of the Currency (“OCC”) issued draft principles (the “Proposal”) on the identification and management of climate-related financial risks by OCC-supervised banks with more than $100 billion in total consolidated assets (“covered
FSOC Issues Report on Climate-Related Financial Risk
On Thursday, October 21, 2021, the Financial Stability Oversight Council released a Report on Climate-Related Financial Risk (the “Report”). The Report represents the culmination of a deliberative process that began on May 20, 2021, when President Biden signed an Executive
Federal Banking Agencies Issue Proposed Guidance on Third-Party Risk Management
On Tuesday, July 13, 2021, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (collectively, the “Agencies”) invited public comment on proposed interagency guidance on managing