LendingClub Corporation is a non-bank lender that makes loans to consumers. The complaint for this class action alleges that it violates Pennsylvania law by charging consumers excessive interest and fees not permitted by the Loan Interest Protection Law (LIPL), the Consumer Discount Company Act (CDCA), and the Unfair Trade Practices and Consumer Protection Law (UTPCPL).
The class for this action is all persons who got a loan from LendingClub with an Allegheny County, Pennsylvania address and paid interest and fees that aggregated to more than 6% simple interest per year, within the applicable statute of limitations.
Pennsylvania’s consumer finance laws protect consumers borrowing from non-banks in a number of ways. For one thing, non-banks that do not have a CDCA license cannot charge more than 6% simple interest per year. The 6% amount includes amounts of loan fees as well. When non-banks obtain a CDCA license, they can charge higher rates of interest and a limited amount in fees.
The complaint alleges that LendingClub is a non-bank without a CDCA license. It further claims that, if it deems a loan applicant to be creditworthy, it asks WebBank to issue the loan, and that WebBank does so and then sells the loan to LendingClub.
The plaintiff in this case, John Strong, obtained a personal loan of $5,500 from LendingClub. However, the complaint alleges that Strong only received $5,170 because LendingClub took a $330 “origination fee” off the top of the amount. According to the complaint, the specified interest rate plus this origination fee came to around 36% interest.
When Strong could no longer make payments on the loan, LendingClub sold it to a debt buyer, UHG. UHG sued Strong for it, but the complaint claims that he received an award in his favor in arbitration, and, while UHG appealed, it eventually dismissed its case with prejudice.
The complaint alleges that LendingClub does not have a CDCA license and so was not permitted to charge Strong interest and fees that together added up to more than 6% per year. While LendingClub has an arrangement with WebBank, the complaint asserts that this is simply to try to get around the laws that limit its own unlicensed, non-bank lending limits, “but this partnership does not make LendingClub’s loans lawful.”
“Although banks like WebBank may lawfully charge interest and fees at the rates and amounts charged on LendingClub’s loans,” the complaint claims, “LendingClub cannot take advantage of the rights granted to banks once a loan is sold.” In any case, the complaint alleges that WebBank is not the true lender and that LendingClub’s loans are not lawful.
Article Type: LawsuitTopic: Loans
Most Recent Case Event
LendingClub Loans Circumvent Pennsylvania Lending Laws Complaint
June 23, 2022
LendingClub Corporation is a non-bank lender that makes loans to consumers. The complaint for this class action alleges that it violates Pennsylvania law by charging consumers excessive interest and fees not permitted by the Loan Interest Protection Law (LIPL), the Consumer Discount Company Act (CDCA), and the Unfair Trade Practices and Consumer Protection Law (UTPCPL).
LendingClub Loans Circumvent Pennsylvania Lending Laws ComplaintCase Event History
LendingClub Loans Circumvent Pennsylvania Lending Laws Complaint
June 23, 2022
LendingClub Corporation is a non-bank lender that makes loans to consumers. The complaint for this class action alleges that it violates Pennsylvania law by charging consumers excessive interest and fees not permitted by the Loan Interest Protection Law (LIPL), the Consumer Discount Company Act (CDCA), and the Unfair Trade Practices and Consumer Protection Law (UTPCPL).
LendingClub Loans Circumvent Pennsylvania Lending Laws Complaint