AFSA's State Government Affairs has released its July white paper addressing concerns about the "true lender" doctrine and state actions to prevent evasion of interest rate caps through bank-fintech partnerships.
Banks are allowed to export interest rates under federal law, but some states claim that non-bank partners are acting as lenders to avoid state usury laws. In response, several states have enacted or considered laws to define true lenders based on who holds the predominant economic interest, indicating a move towards stricter consumer lending regulations.
This white paper and other SGA letters can be found in the direct advocacy section of AFSA’s website.