Law360A present decision of this U.S. District Court for the Eastern District of Pennsylvania has highlighted yet again the regulatory dangers that the alleged lender that is“true doctrine can cause for internet-based loan providers who partner with banks to ascertain exemptions from relevant state customer security legislation (including usury rules). Even though the Court failed to reach a ultimate decision on the merits, it declined to simply accept federal preemption as grounds to dismiss an enforcement action brought by the Commonwealth of Pennsylvania against an internet-based payday loan provider who arranged for the state-chartered bank to finance loans at interest levels surpassing the Pennsylvania usury limit.
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