Orrick Appellate Team Files Amicus Brief for ILPA in Ninth Circuit Appeal Addressing Important Issues for Online Lending Industry

October.31.2018

An Orrick appellate team has filed an amicus brief in the Ninth Circuit on behalf of the Innovative Lending Platform Association, urging the court to avoid a broad ruling that could inadvertently affect the dominant models underlying the online lending industry.

The ILPA, a leading industry group supporting clear and sensible regulation of the online commercial lending industry, weighed in on important questions raised in Consumer Protection Financial Bureau v. CashCall. Orrick’s brief addresses two core issues—involving “true lender” and choice-of-law principles—underlying the CFPB’s lawsuit against an online lending platform operating under a model that is vastly different from those typically employed in the online lending industry. The brief takes no position on the merits of the appeal, but urges the court to decide the case narrowly to avoid unintended consequences for the online lending industry at large.

Led by appellate partner Bob Loeb and associate Chris Cariello, Orrick’s brief argues that the court can and should reject the vague “predominant economic interest” true lender standard adopted by the district court, and that doing so will avoid interference with the federally regulated bank-partnership model employed by many online lending platforms. It also explains that the court should rule narrowly on the choice-of-law provisions at issue to avoid potential consequences for online lending platforms adopting the direct lender model, which relies in part on legitimate choice-of-law provisions. Deciding narrowly, the brief explains, will ensure that consumers and small business continue to enjoy the dramatically enhanced access to credit afforded by online lending platforms.

You can read the full brief here.