Chapman has extensive experience representing internet-based platforms engaged in consumer, student, and small business lending and providing other financial products. We also represent many other clients engaged in marketplace lending transactions, including loan purchasers, warehouse line providers and securitizers. We help our clients comply with the novel legal and regulatory issues presented by these programs and assist them in obtaining access to (or providing) a variety of funding solutions.
Issuance Programs and Regulatory Advice. We represent start-up platforms in negotiating loan sale and related agreements with originating bank partners and advise both platforms and investors regarding federal and state consumer protection, lending, and licensing laws and related regulatory requirements.
Lending Facilities. We represent both lending platforms and loan investors in whole loan purchase programs, as well as commercial banks, investment banks and borrowers in the negotiation of warehouse loan facilities collateralized by marketplace loans.
Securitization. We represent sponsors, underwriters and indenture trustees in marketplace loan securitizations. We also represent platforms in connection with their issuance of pass-through notes representing fractional interests in underlying marketplace loans.
Investment Companies and Private Funds. We represent regulated investment companies and private funds in connection with investments in marketplace lending products and were the first to structure a closed-end fund filed with the SEC that focuses in marketplace lending investments.
Marketplace Lending and Fintech Updates
- ArticleThe Banking Law JournalMay 2017
The May 2015 decision of the U.S. Court of Appeals for the Second Circuit in Madden v. Midland Funding, LLC sent shockwaves through the marketplace lending industry, and nearly two years later the questions generated by this case remain largely unanswered. These questions have been further complicated by the long-awaited remand decision from the U.S. District Court for the Southern District of New York.
- White PaperMarch 2017
The 2017 update of Chapman's annual guide, "The Regulation of Marketplace Lending: A Summary of the Principal Issues," discusses a number of significant court cases and regulatory initiatives that have impacted marketplace lending over the past year.
- NewsMarch 2017
Chapman Partner Marc Franson participated in a panel discussion, entitled "True Lender and Madden Case: Impact on the Industry Two Years In," at the 2017 LendIt USA Conference.
- RecognitionMarch 7, 2017
Chapman was named the “Top Law Firm” at the inaugural LendIt Industry Awards, recognizing the firm's outstanding achievement in marketplace lending and fintech.
- Client AlertFebruary 28, 2017
On February 27, the U.S. District Court for the Southern District of New York issued its long-awaited remand decision in Madden v. Midland Funding, LLC.
- ArticleIllinois BankerNovember/December 2016
Considering the flurry of activity in the fintech arena, is there a place for banks and, if so, what role can banks play? Given that marketplace lending is the most developed form of fintech today, it can be analyzed to see how banks do play important roles and employ different strategies dealing with this emerging market segment.
- To the Point!Legal, Operations, and Strategy Briefs for Financial InstitutionsDecember 6, 2016
On Friday, Comptroller of the Currency Thomas Curry announced that the Office of the Comptroller of the Currency will issue limited-purpose bank charters to qualified fintech companies.
- ArticleLending TimesJuly 25, 2016 (Originally Published July 22, 2016)
A recent decision of the Maryland Court of Appeals could require marketplace lenders and others who arrange for federal or state banks to fund consumer loans to consumers residing in Maryland to obtain licenses as “credit services businesses” and could prohibit them from arranging those loans at interest rates exceeding the applicable Maryland usury caps.
- Client AlertMay 16, 2016
On May 10, 2016 the U.S. Department of the Treasury published a white paper entitled “Opportunities and Challenges in Online Marketplace Lending.” The White Paper follows the “Request for Information” which the Department published in July 2015 to solicit public input on various topics concerning marketplace lending.
- ArticleFDIC Emphasizes Corporate Leadership to Address the Key Risk Management Issues Raised by Cybersecurity and Marketplace LendingPratt's Privacy & Cybersecurity Law ReportMay 2016 (Originally Published February 3, 2016)
Pratt's Privacy & Cybersecurity Law Report republished a special edition of Chapman's To the Point! newsletter.
- Client AlertMarch 21, 2016
On Friday, March 18, 2016, the United States Supreme Court issued a call for the views of the Solicitor General of the United States before it decides whether to hear an appeal from a Second Circuit Court of Appeals decision rendered last May in the case of Madden v. Midland Funding, LLC.
- To the Point!Legal, Operations, and Strategy Briefs for Financial InstitutionsMarch 10, 2016
On March 7, the CFPB announced that it is accepting consumer complaints about online marketplace lenders, giving consumers “a greater voice in these markets and a place to turn to when they encounter problems.” The CFPB also issued a bulletin to provide consumers with information on marketplace lending.
- Client AlertFebruary 1, 2016
A recent decision of the U.S. District Court for the Eastern District of Pennsylvania has highlighted once again the regulatory risks that the so-called “true lender” doctrine can create for internet-based lenders who partner with banks to establish exemptions from applicable state consumer protection laws.
- Client AlertNovember 9, 2015
A recent decision of the Maryland Court of Special Appeals could impact marketplace and other lenders who arrange for federal or state banks to fund consumer loans in Maryland at rates in excess of the applicable Maryland usury caps.
- Comment LetterSeptember 30, 2015
Chapman attorneys served as drafting counsel on a comment letter submitted to the Department of the Treasury by the Structured Finance Industry Group.
- ArticleFederal Court Decision Creates Uncertainty for Non-Bank Loan Assignees and Certain Marketplace Lenders Regarding the Scope of Federal Preemption of State Usury LawsThe Banking Law JournalSeptember 2015 (Originally Published June 3, 2015)
The Banking Law Journal republished a Chapman Client Alert.
- Client AlertAugust 13, 2015
In the case of Madden v. Midland Funding, LLC, the Second Circuit narrowly interpreted the scope of federal preemption of state usury laws under the National Bank Act as such laws apply to certain non‑bank loan assignees.
- To the Point!Legal, Operations, and Strategy Briefs for Financial InstitutionsJuly 29, 2015
In this edition:
- Telephone Consumer Protection Act Declaratory Ruling
- CFPB First Monthly Complaint Report
- Treasury Department Inquires about Marketplace Lending
- To the Point!Legal, Operations, and Strategy Briefs for Financial InstitutionsMay 8, 2015
In this edition:
- U.S. Supreme Court Will Not Hear CashCall Case – Uncertainty for Marketplace Lenders?
- FinCEN Current Priorities
- Guidance on Youth Savings Programs
- Overdraft Update – CFPB Enforcement Action