Andrew Narod Quoted in TechCrunch on AI Fintech Startup’s Legal and Financial Woes
June, 2024 - Birmingham, Alabama
Bradley attorney Andrew Narod was quoted in TechCrunch in an article on startup LoanSnap, an AI mortgage company that is facing a number of legal and financial problems. Since December 2022, LoanSnap has been sued by at least seven creditors, has been fined by state and federal agencies, and nearly lost its license to operate in Connecticut, according to legal documents obtained by TechCrunch.
In January 2024, Connecticut’s Department of Banking alleged that LoanSnap was participating in “systemic unlicensed mortgage loan” activity by employing unlicensed people. One employee said that the company was eager to hire those without much mortgage experience, with the idea of training them so they could one day get licenses. Connecticut also claimed that LoanSnap violated the Fair Credit Reporting Act, the SAFE Act, and the Fair Lending Act, among other state statutes, and threatened to revoke its license. Ultimately, LoanSnap paid a $75,000 fine without admitting fault and promised not to use unlicensed people for mortgage loan officer work in the state.
“It’s a really big deal for them to threaten that,” said Narod. But Narod noted that the settlement wasn’t “particularly onerous,” adding, “Pay $75,000 and stop doing illegal things, which, candidly, really should have been the business model from the start.”
The full article, “After raising $100M, AI fintech LoanSnap is being sued, fined, evicted,” was published by TechCrunch on June 3, 2024.
