Wheels Financial Group, LLC d/b/a LoanMart

On December 21, 2021, the California Department of Financial Protection and Innovation announced a consent order against Wheels Financial Group, doing business as LoanMart, a fintech-like auto title loan servicer. The action stemmed from a 'true lender' investigation examining whether LoanMart was using a partnership with a Utah state-chartered bank to evade California interest rate caps. Under the consent order, LoanMart agreed not to market or service high-interest loans under $10,000 originated through state-chartered banks, without admitting to any violations. This case highlights the regulatory scrutiny of bank-fintech lending partnerships and the 'true lender' doctrine, which is directly relevant to the BaaS model where fintechs leverage bank charters for lending activities.

Verified from source: The California DFPI entered into a consent order with Wheels Financial Group (LoanMart) following a 'true lender' investigation into its partnership with a Utah state-chartered bank to potentially evade interest rate caps under the Fair Access to Credit Act. LoanMart agreed not to market or service vehicle-secured installment consumer loans under $10,000 at rates exceeding 36% plus the federal funds rate through a state-chartered bank program.