Axcess Financial Services Operates Unlawful ‘Rent-a-Bank’ Lending Scheme, Class Action Claims

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A proposed class action alleges Axcess Financial Services, Inc. has operated an illegal “rent-a-bank” scheme whereby it has charged California residents high interest rates on loans while evading state usury laws.

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The eight-page lawsuit claims that Axcess, which does business under the business brand Xact, has issued loans to California residents through Xact.com with interest rates as high as 200 percent while purporting to be operated by a state-chartered bank in Utah, Capital Community Bank. Although it appears on paper that Capital Community Bank issues the loans offered through Xact.com, the case contends that the Utah institution has “virtually no involvement” in these loans and that Axcess merely uses its name on loan documents in an attempt to circumvent California interest rate limitations.

According to the complaint, Axcess is the entity that markets, underwrites, originates and services the loans at issue to California consumers. In fact, Capital Community Bank says on its website that it only serves “the banking needs of Utah residents,” the case relays.

“Axcess directs its marketing activities for illegally-priced loans to low-income California residents, many of whom are vulnerable to exploitation,” the filing reads, adding that high-interest rate loans can trap such consumers in cycles of debt.

The plaintiff, a California resident, says they obtained from the Xact website in November 2022 a $1,000 loan with an annual interest rate of 214.41 percent. As an unlicensed lender, Axcess was prohibited under California law from issuing loans with interest rates higher than 10 percent per annum, the suit claims. 

The lawsuit looks to cover anyone in California who, during the applicable statute of limitations period, obtained a loan that was advertised, made or serviced by Axcess and paid interest on such loan at a rate in excess of 10 percent.

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