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CALIFORNIA CORPORATE & SECURITIES LAW

DBO Defeats Preliminary Injunction Files Suit Against Prorater

Last month, I wrote about Judge Lucy Koh’s decision not to preliminarily enjoin the Department of Business Oversight’s investigation of Nationwide Biweekly Administration, Inc. for unlicensed activity under California’s Check Sellers, Bill Payers and Proraters Law.  Cal. Fin. Code § 12000 et seq.   Judge Koh concluded that the law’s requirement that licensees be California corporations did not violate the Commerce Clause of the U.S. Constitution.  Nationwide Biweekly Admin., Inc. v. Owen, 2015 U.S. Dist. LEXIS 34558 (N.D. Cal. Mar. 18, 2015).

On Friday, the Department announced that it is suing Nationwide Biweekly for unlicensed activity in the Superior Court for Alameda County.  The complaint was filed jointly with the District Attorneys of Alameda, Marin and Monterey counties.  The local prosecutors are alleging that the company violated California unfair business practices law and engaged in false advertising.

A few days earlier, the Consumer Financial Protection Bureau filed its own complaint in the U.S. District Court for the Northern District of California alleging that the company misrepresents the interest savings consumers will achieve through a biweekly mortgage payment program and misleads consumers about the cost of the program.

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