In a significant development on the legal front, a dispute between a nonbank lender and the Colorado Administrator of the Uniform Consumer Credit Code (Administrator) has culminated in an Assurance of Discontinuance. The agreement, announced on November 13, 2023, was arranged to settle allegations that the lender had charged consumers unauthorized membership fees under the Colorado Consumer Credit Code (Code).
The controversy revolved around the lender’s policy of charging membership fees to clients for accessing its loan products. It was alleged that these fees were not authorized under the do’s and don’ts spelled out in the Code, hence attracting the attention of the Administrator. With the signing of the Assurance of Discontinuance, the lender has pledged to discontinue this practice as part of its agreement with the Colorado authority.
This development underscores the importance of understanding and adhering to consumer credit regulations in all jurisdictions, particularly those related to additional charges such as membership fees that may be passed onto consumers. As a result of this settlement, lenders operating in Colorado may need to reassess their practices to ensure compliance with the Code.
As legal professionals working in some of the world’s biggest corporations and law firms, it is crucial to keep abreast of such developments. They have the potential to significantly impact business operations and expose organizations to legal risks and reputational damage.
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