Photo of Matthew Verdin

Matthew Verdin

Subscribe to Matthew Verdin's Posts

Matthew Verdin specializes in defending class actions and complex commercial disputes. He has significant experience representing clients in the financial services and technology industries, achieving favorable outcomes in litigation involving consumer protection, trademark, and privacy claims.

Contact: Read more about Matthew VerdinEmail

May courts look beyond the face of a loan transaction to identify the “true lender”?  In a lawsuit filed by California’s financial regulator, a California state court recently answered yes, finding that a fact-intensive inquiry into the “substance” of a loan transaction was necessary to determine who the “true lender” is and declining to dismiss a lawsuit. See Opportunity Fin., LLC v. Hewlett, No. 22STCV08163 (Cal. Super. Ct. Sept. 30, 2022).…

Continue Reading California Court Applies “Substance Over Form,” Allows True Lender Claim to Proceed

Can plaintiffs spring a class action on defendants in the late stages of a case?  The Seventh Circuit recently answered no in Ali v. City of Chicago, 34 F.4th 594 (7th Cir. 2022), rejecting so-called stealth class actions and reaffirming a seemingly obvious rule: a class action “must be brought as a class action.”…

Continue Reading Seventh Circuit Rejects “Stealth” Class Actions

A bank partnership is the target of yet another “true lender” attack in a new class action filed last week. Michael v. Opportunity Fin., LLC, No. 1:22-cv-00529 (W.D. Tex. June 1, 2022).  The lawsuit is aimed at the lending partnership between OppFi (a fintech) and FinWise Bank (its bank partner), which was also the target of a recent investigation by California’s banking regulator and another class action earlier this year.  This latest development cements a growing trend of true lender attacks after Congress repealed a regulation on the topic last year, dashing hopes of a uniform and predictable standard to identify the “true lender” in bank partnerships.…

Continue Reading Bank Partnership Attacked (Again) Under True Lender Theory

Class action plaintiffs often attempt to drag an out-of-state parent company into a forum based solely on the contacts of a subsidiary under the so-called alter ego theory of personal jurisdiction (sometimes called a jurisdictional veil-piercing theory).  This theory allows a court to impute a subsidiary’s contacts with a forum to its parent when the subsidiary is found to be an “alter ego” of the parent company. 

Companies must understand how courts apply the alter ego jurisdictional theory and best practices to minimize the unique risks this theory presents.…

Continue Reading A Closer Look: Avoiding Personal Jurisdiction Under An Alter Ego Theory

In the wake of rulings upholding federal regulators’ “valid when made” rules, a new lawsuit serves as a reminder that state regulators and class-action plaintiffs’ lawyers may continue to challenge the bank partnership lending model under the “true lender” doctrine.…

Continue Reading Fintech Lawsuit Highlights True Lender Risk for Bank Partnership Lending Model

Delivering a significant win for the financial services industry, a California federal judge upheld “valid when made” rules promulgated by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) in California v. OCC, No. 4:20-cv-05200 (N.D. Cal. Feb. 8, 2022) and California v. FDIC, No. 4:20-cv-05860 (N.D. Cal. Feb. 8, 2022).  Those rules sought to undo the Second Circuit’s 2015 decision in Madden v. Midland Funding—a decision that class-action plaintiffs’ lawyers and state regulators have invoked to bring lawsuits challenging so-called “rent-a-bank” schemes between banks and third parties.  The rules were finalized in June and July 2020, and established a bright-line rule that the interest rate charged on a bank-made loan may still be charged after the loan is sold to a third party.…

Continue Reading A Closer Look: Federal Court Upholds OCC’s & FDIC’s Valid-When-Made Rules