Mass. Retailer Sues Over Alleged High-Interest Loan Scheme
Law360, New York (October 13, 2017, 6:25 PM EDT) -- A Massachusetts clothing and sports retailer filed suit in federal court Thursday alleging that financial technology company Kabbage Inc. evaded state law by offering high-interest loans through an industrial bank based in Utah, which places no ceiling on interest rates for commercial loans, all the while serving as the true lender.
NRO Boston LLC and owner Alice Indelicato accuse Kabbage and Celtic Bank Corp. of devastating the retailer with their "rent-a-bank" scheme, whereby the bank was listed as the lender for loans in order to get around Massachusetts usury laws, allowing the financial technology company to charge small-business interest rates far...
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