Cadwalader attorneys
reviewed a case concerning marketplace lending in which certain
securitization trusts that had acquired the defendants' loans
were charged for violations of the Colorado Uniform Consumer Credit
Code ("UCCC").
In 2017, the Administrator of the UCCC
("Administrator") sued Avant of Colorado LLC and Marlette
Funding LLC ("Defendants") in separate actions. The
Administrator alleged that the Defendants made loans to Colorado
consumers and charged interest rates above the maximum rate allowed
by the UCCC. The Administrator asserted that, although the loans
were nominally by out-of-state FDIC-insured state-chartered banks
(for Avant, Utah's WebBank, and, for Marlette, New Jersey's
Cross River Bank), the "true lenders" were Avant and
Marlette. Although out-of-state banks are permitted to
"export" interest rates and certain fees when making
loans to Colorado consumers, according to the Administrator,
exportation rights do not apply to entities such as
