Colorado Federal Court Dismisses Bank Lawsuit in Bank Partnership Case

In an adverse decision for bank partnership programs, the U.S. District Court for the District of Colorado (Denver) has dismissed a key lawsuit filed by a state bank against the Administrator of the Uniform Consumer Credit Code for the State of Colorado. Colorado’s Administrator of the Uniform Consumer Credit Code sued a fintech company in 2016, alleging that it lacked licenses to operate in the state and that the fintech company was the true lender of loans originated by the state bank. The fintech company removed the lawsuit to federal court, and the bank filed its own, separate lawsuit directly against the regulator, claiming that the regulator’s lawsuit interfered with the bank’s powers under federal law. Earlier this month, the same court remanded the regulator’s lawsuit against the fintech company to state court. The court noted that state law claims brought only against non-bank entities like the fintech company are not subject to complete preemption, even if the state law claims would have been subject to complete preemption if they had been brought against a national or state-chartered bank. Accordingly, the court concluded that fintech company had no basis to support an order for removal to federal court. In the decision to dismiss the bank’s lawsuit, the court held that the bank sought to directly interfere in the regulator’s lawsuit, and thus the bank’s lawsuit should be dismissed.

WebBank v. Meade – ORDER Motion to Dismiss is Granted 031918

Judge dismisses WebBank suit against Colorado regulators _ Debtwire


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