Maryland Governor Signs Law Undoing Part of CashCall Case

Maryland Governor Larry Hogan recently signed legislation to make it easier for loan brokers to operate in Maryland. Senate Bill 68 reduces the burden placed on loan brokers by the Maryland Court of Appeals' interpretation of the Maryland Credit Services Business Act in the CashCall, Inc., case. In CashCall, the Maryland high court held that the MCSBA applied to loan brokers, regardless of which party to a loan compensated the loan broker and regardless of whether the loan broker entered into a contract with a consumer for loan brokering services. This broadening of the law imposed various obligations on loan brokers, many of whom operate as partners to banks, including statutory mandates to enter into an agreement with a consumer and to disclose certain terms in an "information statement." Unfortunately, the CashCall decision created consumer confusion, as many loan brokers operating today do not take money from consumers to broker loans and do not enter into contracts with consumers. SB 68 legislatively reversed the impact of the CashCall decision by removing the obligation of loan brokers to provide information statements and other irrelevant disclosures to consumers.

SB 68 takes effect October 1, 2019.

Senate Bill 68

CashCall Decision Summary

CounselorLibrary.com, LLC, is an entity affiliated with the law firm of Hudson Cook, LLP. CounselorLibrary.com, LLC articles are written by attorneys with Hudson Cook, LLP, and by other authors, including employees of CounselorLibrary.com, LLC. The views and opinions contained in the articles do not constitute the views and opinions of Hudson Cook, LLP. CounselorLibrary(R) products and services are available directly through and from www.CounselorLibrary.com and are not legal advice.

Hudson Cook, LLP provides articles, webinars and other content on its website from time to time provided both by attorneys with Hudson Cook, LLP, and by other outside authors, for information purposes only. Hudson Cook, LLP does not warrant the accuracy or completeness of the content, and has no duty to correct or update information contained on its website. The views and opinions contained in the content provided on the Hudson Cook, LLP website do not constitute the views and opinion of the firm. Such content does not constitute legal advice from such authors or from Hudson Cook, LLP. For legal advice on a matter, one should seek the advice of counsel.