During the last weeks, two notable situations in federal court challenging particular areas of the business enterprise style of marketplace financing organizations headed down split paths. First, within an action brought against Kabbage, Inc. and Celtic Bank Corporation in america District Court when it comes to District of Massachusetts, 1 the ongoing parties decided to, as well as the Court authorized, a stipulation remaining the procedures pending an arbitrator’s post on if the claims for the reason that action are included in the arbitration conditions within the governing loan agreements. 2nd, within an action against market loan provider Avant in america District Court when it comes to District of Colorado, 2 the Court accepted a magistrate judge’s suggestion to remand the situation to convey court over Avant’s objection.
The Kabbage Action (Massachusetts)
A non-bank finance company, and Celtic Bank, Kabbage’s lending partner, alleging violations of Massachusetts’ criminal usury and consumer protection laws in October 2017, Plaintiffs NRO Boston, LLC and Alice Indelicato sued Kabbage. The maximum rate allowed under the Massachusetts criminal usury statute in short, Plaintiffs alleged that Kabbage’s arrangement with Utah-based Celtic Bank enabled it to make loans with interest rates exceeding twenty percent.