Continuing Uncertainty After Colorado Compromise: The Limited Impact of the Avant-Marlette Settlement on True Lender Risk for Nonbank-Bank Partnerships

In August 2020, two nonbank fintechs—Avant and Marlette Funding—and their partner banks— WebBank and Cross River Bank—reached a “landmark settlement” with Colorado regulators (the “Settlement”) to determine who is the “true lender” of loans originated under their partnerships. Under the Settlement, the nonbank-bank partnerships are permissible under Colorado law, provided that they comply with the terms of a Safe Harbor that is […]