Merchant Cash Advance Lenders' Defense - Awaiting Court's Decision

A Surge of Lawsuits Filed by Merchant Cash Advance Funders in Rockland County Supreme Court.

The lawsuits are filed by a small group of law firms representing a limited number of clients such as Capytal, NewCo Capital, Samson Capital, and MCA Capital, have initiated these lawsuits. These clients are all based in the same office complex situated behind a veterinary clinic in Pomona.

Additionally, other plaintiffs and funders like Paladin Funding, Apollo Funding, Kalamata, and Black Olive, share office spaces and operate from virtual offices located at Blue Hill Plaza. Moreover, entities like CloudFund are conducting their operations from comparable shared office spaces in Suffern.

These cases, often filed in Rockland County, question whether MCAs are simply purchases of future receivables or illegal, usurious loans with high interest rates.

Recent court decisions and a victory by the New York State Attorney General against predatory lenders suggest a shift in how these MCAs are viewed legally, potentially classifying them as usurious loans if found to charge excessively high interest rates.

Should the merchant cash advances be deemed as loans, the interest rates could be labeled as excessively high, rendering the agreements void.

Attorneys representing clients in these cases are paying close attention to these court decisions.

Wisconsin’s Predatory Lending Prevention Act

The act proposes a 36% annual percentage rate (APR) cap, limiting how high the interest rates can be. The senator believes this Act will promote financial security for many Wisconsin residents.

The act seeks to prevent predatory lending by curbing astronomically high-interest rates charged by payday lenders and auto title lenders.

Senator Jacque argues that these lenders target the most vulnerable population and trap them into a cycle of debt.

Our Opinion:

While regulation is necessary to maintain a fair and just economic environment, the ultimate goal should be to cultivate an industry where ethical practices are the norm, thereby minimizing the need for stringent regulatory interventions. The move towards more ethical lending practices not only protects consumers but also ensures the long-term sustainability and integrity of the financial sector.

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