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Womble Carlyle attorney Richard Garabedian discussed the proposed changes with American Banker. Under the proposal, all companies that make personal loans of $25,000 or less or commercial loans of $50,000 or less would have to be licensed, regardless of the interest rate charged. Currently, New York requires lending companies to obtain a license only if they charge more than 16% interest.
In addition, the proposal would expand the definition of companies regulated to include marketplace lenders and merchant cash advance companies. The new rule would apply to any company involved in the loan process, even if the company isn’t directly providing the loan.
"New York is trying to throw a wide net for everyone who solicits business in the state of New York through the internet,” Garabedian said.
Click here to read the full article “New York Seeks to Expand Authority over FinTechs” in American Banker (subscription required). The article also was published in the Credit Union Journal.
Richard Garabedian is based in Womble Carlyle’s Washington, D.C. office where he represents financial industry clients in mergers and acquisitions, as well as regulatory matters. He also advises clients on bank and credit union charter changes, new products and services, de novo bank formations, government assisted acquisitions of failing financial institutions, enforcement matters, corporate governance, stock and mutual holding company formations and mutual-to-stock conversions. Garabedian is also a member of the firm’s FinTech Leadership Team and the Impact Economy Team.