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INTRODUCTION The laws governing the financial technology ('FinTech') services companies have continued to develop. One prominent business model utilized by FinTech companies involves partnerships with traditional depository institutions, often state-chartered, [...]

'Rent-a-bank' arrangements are the vehicle of choice for subprime lenders seeking to avoid state consumer protection laws. In a rent-a-bank arrangement, a nonbank lender contracts with a bank to make loans per its specifications and then buys the loans from the bank. The nonbank lender then claims to shelter in the bank's federal statutory exemptions from state regulation. The validity of these arrangements is the most bitterly contested legal question in consumer finance. The rent-a-bank phenomenon is a function of a binary, entity-based regulatory approach that treats banks differently than nonbanks and that treats bank safety-and-soundness regulation as a substitute for consumer protection laws. The entity-based regulatory system is based on the dated assumption that transactions align with entities, such that a single entity will perform an entire transaction. Consumer lending, however, has become 'disaggregated,' so the discrete parts of lending--marketing, underwriting, funding, servicing, and holding of risk--are frequently split up among multiple, unaffiliated entities. The binary, entity-based regulatory system is a mismatch for disaggregated transactions involving a mosaic of bank and nonbank entities. The mismatch facilitates regulatory arbitrage of consumer protection laws through rent-a-bank arrangements, as nonbanks claim favorable regulatory treatment by virtue of the involvement of a bank in parts of a transaction. Courts' attempts to address such arbitrages have resulted in an unpredictable doctrinal muddle. This Article argues that the best approach to disaggregated lending is a presumption that the privileges of a banking charter do not extend beyond banks, coupled with an anti-evasion principle that looks to substance over form and captures rent-a-bank transactions based on derivatives rather than outright sales of loans. Such an approach would create greater certainty about the legality of transactions, while effectuating both state consumer protection laws and federal bank regulation policy., Table of Contents Introduction I. The Disaggregation of Consumer Lending A. Functions of Usury Laws B. Marquette and the Race to the Bottom C. The Changing Institutional Landscape of Consumer [...]

The Helping Families Save Their Homes Act of 2009 has amended the Truth in Lending Act through the Section 404(a) of the Act. The Board of Governors of the Federal Reserve System has promulgated an interim final rule to provide interpretive guidance on which purchasers and assignees of mortgage loans are covered by the Act. Details of the final rule are also discussed.

INTRODUCTION Extraordinary financial and economic events that continued over the past year kept the the Federal Reserve Board ('FRB') on a demanding agenda. The FRB made additional sweeping changes and [...]

INTRODUCTION Last year the Truth in Lending Act (TILA) (1) and its implementing regulation, Federal Reserve Board (FRB) Regulation Z, (2) revisions to the FRB Official Staff Commentary to Regulation [...]

INTERIM RULE ON ELECTRONIC DISCLOSURES The Federal Reserve Board (FRB) issued an Interim Rule on electronic Truth in Lending disclosures in March 2001, (1) and then lifted or postponed the [...]

This article reviews the new amendment to Regulation Z issued by the Federal Reserve Board. The amendments regulate truth in lending for high cost mortgages.