UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA 

DISTRICT OF COLUMBIA 

Plaintiff, 

v. 

ELEVATE CREDIT, INC. 

Defendant.

Civ. Action No. 20-1809 (EGS) 

MEMORANDUM OPINION 

The District of Columbia (“Plaintiff” or “the District”) 

filed this consumer protection enforcement action against 

Elevate Credit, Inc. (“Defendant” or “Elevate”) in the Superior 

Court of the District of Columbia (“Superior Court”) for alleged 

violations of the District of Columbia Consumer Protection Act 

(“CPPA”), D.C. Code §§ 28-3901 et seq. The District alleges that 

Elevate, an unlicensed online money lender, operates what is 

commonly referred to as a “rent-a-bank” scheme whereby a lender 

markets and sells high-interest loans to consumers in one state, 

where interest rate caps are low, using a partnership with a 

bank chartered in a different state, where interest rate caps 

are much higher, in an attempt to skirt the lower interest rate 

caps in the state where the loans are being made. This suit 

seeks to prevent Elevate from using this alleged rent-a-bank 

arrangement as an end run around the District’s consumer 

protection laws. The District alleges that Elevate is the “true 
2

lender” of loans it markets and sells to District residents that 

contain interest rates of up to 149% for one of its products and 

251% for another of its products—well in excess of the 24% and 

6% caps in the District’s usury statutes—and that Elevate 

misrepresents material characteristics of these loans when 

marketing them to consumers, all in violation of the CPPA. See 

generally Compl., ECF No. 1-2. 

Elevate removed the case to this Court, asserting that 

jurisdiction exists here pursuant to 28 U.S.C. §§ 1331 and 1441

because the District’s claims: (1) are completely preempted by 

federal banking law; and (2) they implicate significant federal 

issues and invoke serious federal interests. Notice of Removal, 

ECF No. 1 at 12.1 Pending before the Court is the District’s 

Motion to Remand to the Superior Court for lack of subject 

matter jurisdiction. See Pl.’s Mot. Remand (“Pl.’s Mot.”), ECF 

No. 15. Upon careful consideration of the motion, opposition, 

and reply thereto, the notice of supplemental authority and the 

response thereto, the applicable law, and the entire record 

herein, Plaintiff’s Motion to Remand is GRANTED. 

1 When citing electronic filings throughout this Opinion, the 

Court cites to the ECF page number, not the page number of the 

filed document.
3

I. Background

1. Factual Background

The following facts—drawn from the Complaint and documents 

incorporated by reference therein—are assumed to be true. See 

Colon v. Ashby, 314 F. Supp. 3d 116, 120 (D.D.C. 2018) (quoting 

Walter E. Campbell Co. v. Hartford Fin. Servs. Grp., Inc., 48 F. 

Supp. 3d 53, 55 (D.D.C. 2014) (“When assessing a remand motion, 

. . . the court ‘must assume all of the facts set forth by 

plaintiff to be true and resolve all uncertainties as to state 

substantive law in favor of the plaintiff.’”).

Elevate, a Delaware corporation, is an “online lender that 

operates through several websites . . . to provide predatory, 

high-interest, short-term loans to consumers that it describes 

as individuals ‘with little to no savings, urgent credit needs 

and limited options.’” Compl., ECF No. 1-2 ¶¶ 1, 10. Elevate 

describes its business model in its 2019 annual report filed 

with the Securities and Exchange Commission (“2019 10-K”) as 

“provid[ing] convenient, competitively priced financial 

solutions to our customers, who are not well-served by either 

banks or legacy non-prime lenders, by using our advanced 

technology platform and proprietary risk analytics.” Id. ¶ 4. 

Elevate has “offered, provided, serviced, and advertised loans 

to District residents in conjunction with FinWise Bank 

(‘FinWise’), a Utah-chartered bank, for its Rise brand, and 
4

Republic Bank & Trust Company (‘Republic’), a Kentucky-chartered 

bank, for its Elastic brand.” Id. ¶ 10. Elevate’s Rise brand is 

an installment loan that offers “fast approval for loans between 

$500 and $5,000,” id. ¶ 24; and its Elastic brand is “a line of 

credit in amounts between $500 and $4,500,” id. ¶ 49. Elevate 

has provided at least 871 Rise loans and 1,680 Elastic loans to 

District consumers. Id. ¶ 15. The District alleges Elevate 

deceptively markets these loans and charges illegal interest 

rates—between 99% and 149% on its Rise loans and between 129% 

and 251% on its Elastic loans, “well in excess of the District’s 

usury caps.” Id. ¶¶ 23, 48. 

According to the District, Elevate is the true lender of 

the Rise and Elastic loans. Id. ¶¶ 36-47, 68-79. The District 

alleges that Elevate provides the marketing for the Rise and 

Elastic products “through direct mail, E-mails, and via banner 

ads on the Internet that were either accessible to or directed 

at District residents.” Id. ¶¶ 17, 18. Elevate “prepares product 

offerings and associated marketing materials; develops and 

places internet, print media, radio and television advertising; 

designs and develops websites; and delivers all notices and 

disclosures to consumers.” Id. ¶¶ 25, 52. Elevate is solely 

responsible for “all costs and expenses associated with 

advertising and developing promotional materials” for Rise and 

Elastic loans. Id. ¶¶ 26, 53.
5

The District also alleges that Elevate “has the predominant 

economic interest in the loans it provides to District consumers 

via FinWise and Republic.” Id. ¶ 22. For the Rise loans, the 

District contends Elevate funds the loans, reaps the profits of 

good loans, takes on the risk of bad loans, and acts as the 

servicer of the loans. Id. ¶ 36. The District contends Elevate 

“in essence rents FinWise to provide the loan,” but “it is 

Elevate that directs and controls the funding of the loan.” Id.

¶ 37. Elevate “funds Rise loans through its captive credit 

financing relationship with Victory Park Management, LLC 

(‘VPC’),” which provides debt financing for Elevate, without 

which Elevate would “have to secure other sources of debt 

financing or potentially reduce loan originations.” Id. ¶ 38.

Elevate also “reaps most of the profits” from the Rise brand 

loans. Id. ¶ 39. In 2019, Elevate’s revenue from the Rise brand 

loans totaled approximately $390,354,000. Id. ¶ 40. Elevate EE 

SPV (“EE SPV”)—"a Cayman Islands special purpose vehicle that 

operates for the financial benefit of Elevate”—has allegedly 

purchased a 96% interest in the receivables for the Rise loans, 

including the principal and interest due on the loans. Id. ¶ 41. 

The District contends that EE SPV is thus the “legal and 

equitable owner of the receivables from the loans,” and these 

receivables generate income for Elevate, “the primary 

beneficiary of EE SPV.” Id. Indeed, Elevate’s financial 
6

statements include “revenue, losses and loans receivable related 

to the 96% of Rise installment loans originated by FinWise Bank 

and sold to EE SPV.” Id. ¶ 42. Elevate also “takes the risk of 

bad loans.” Id. ¶ 44. Specifically, “Elevate provides credit 

protections to EE SPV against Rise loan losses,” which “places 

the risk of losses on Elevate.” Id. ¶ 45. Furthermore, 

“FinWise’s interests are protected in its agreement with EE SPV 

by a requirement that EE SPV maintain cash collateral in a 

FinWise account in specified amounts to secure its obligations 

to purchase the loans.” Id. ¶ 46. 

Similarly, for the Elastic brand loans, the District 

alleges Elevate reaps the profits of good loans and takes the 

risk of bad loans. Id. ¶ 68. Again, the District contends 

“Elevate, in essence[,] rents Republic to originate the loans 

that it ultimately controls and profits from through Elevate SPV 

(‘ESPV’).” Id. ¶ 69. According to the District, Elevate’s 2019 

10-K explains that Elevate needs a bank (i.e., Republic) to 

provide access to the Automated Clearing House (“ACH”) system to 

deposit the loans into consumers’ accounts and to withdraw the 

repayments, and “if these banks cease to provide ACH processing 

services or are not allowed to do so, [Elevate] would have to 

materially alter, or possibly discontinue, some or all of [its] 

business if alternative ACH processors or other payment 

mechanisms are not available.” Id. ¶¶ 70-71. Elevate also 
7

profits from the Elastic loans, having brought in approximately 

$248,518,000 in revenue in 2019 from those loans. Id. ¶ 72. 

ESPV—another Cayman Islands special purpose vehicle “that 

operates for the financial benefit of Elevate”—has allegedly 

purchased a 90% interest in the receivables for the Elastic 

brand loans, including the principal and interest due on the 

loans. Id. ¶ 73. ESPV is therefore, according to the District, 

the legal and equitable owner of the receivables of the loans, 

and those receivables generate income for Elevate. Id. As was 

true with respect to the Rise loans, Elevate’s financial 

statements include “revenue, losses and loans receivable related 

to the 90% of Elastic loans originated by Republic and sold to 

ESPV.” Id. ¶ 75. Elevate also “takes the risk of bad Elastic 

loans.” Id. ¶ 76. “Elevate provides credit protection to ESPV 

against Elastic loan losses,” meaning “Elevate holds the risk 

for loan losses.” Id. ¶ 77. “Republic’s interests are protected 

in its agreement with ESPV by a requirement that ESPV maintain 

cash collateral in a Republic account in specified amounts to 

secure its obligations to purchase the loans.” Id. ¶ 78. 

The District also alleges that Elevate, “through one of its 

subsidiaries, also acts as the servicer for” the Rise and 

Elastic loans, which includes reconciling the accounts, posting 

payments and other credits to the accounts, and providing 

periodic billing statements. Id. ¶¶ 47, 79. In addition, Elevate 
8

has “either registered trademarks or has pending applications in 

the United States for the marks Rise and Elastic” and “holds the 

intellectual property rights to its proprietary analytics, 

predictive underwriting models, and software systems,” and it 

“provides the analytics, software, and underwriting models to 

FinWise and Republic for the provision of the Rise and Elastic 

loans.” Id. ¶¶ 20-21. 

2. The District’s Claims Under the District of Columbia 

Consumer Protection Procedures Act 

The District alleges that Elevate violated the CPPA by: (1)

providing high-interest loans to residents of the District with 

interest rates that exceed the permissible amount under District 

law; (2) not registering as a money lender in the District; and 

(3) misrepresenting material characteristics of loans when 

marketing them to consumers. See Compl., ECF No. 1-2. As

relevant here, the CPPA: (1) establishes a right to truthful 

information from merchants about consumer goods; (2) prohibits 

any person from engaging in unfair trade practices; (3) 

prohibits any person from violating the District’s usury laws; 

and (4) prohibits any person from engaging in the business of 

lending money without obtaining a license as a money lender. Id.

at 12-16. 

The Complaint contains the following claims against Elevate 

for violations of Section 28-3904 of the CPPA: (1) 
9

Misrepresentations and Omissions, in violation of D.C. Code §§ 

28-3904(b), (e), (f), and (f-1); (2) Unfair and Unconscionable 

Practices, in violation of D.C. Code §§ 28-3904 and 3904(r); (3)

Violations of the District Usury Laws, in violation of D.C. Code 

§§ 28-3904(ff); and (4) Violations of the District of Columbia 

Municipal Regulation (“DCMR”), in violation of D.C. Code § 28-

3904(dd). Id. As relevant to Count III, it is a violation of 

Chapter 33 of the D.C. Code—the District’s usury laws—for a 

licensed money lender to contract for an interest rate above 

24%, or for a licensed money lender to charge an interest rate 

above 6% if no interest rate is expressed in the contract. See 

28-3301(a), 28-3308(a), and 28-3302(a). As relevant to Count IV, 

it is a violation of the DCMR to engage in the business of 

loaning money in the District without obtaining a license as a 

money lender. See 16 DCMR §§ 201.1 and 200.4. 

3. Elevate’s Assertions in Support of Removal Under 

Section 27 of the Federal Deposit Insurance Act 

Elevate asserts that the Complaint “challenges interest 

rates lawfully charged by state-chartered banks under a federal 

statutory and regulatory scheme administered by the [FDIC].” See 

Notice of Removal, ECF No. 1 at 1. Central to the removal

dispute is Elevate’s contention that the state-chartered banks, 

FinWise and Republic, are responsible for the Rise and Elastic 

loans and interest rates, and Elevate’s only role is as a 
10

servicer provider. Id. ¶¶ 15-30. Unlike non-bank entities like 

Elevate, state-chartered banks are “regulated under a statutory 

structure enacted by Congress and administered by the FDIC.” Id.

¶ 17. 

Two federal statutes establish the maximum amounts of

interest that national and state-chartered banks may charge

their customers: (1) Section 85 the National Bank Act (“NBA”), 

12 U.S.C. § 85, for national banks; and (2) Section 27 the 

Federal Deposit Insurance Act (“FDIA”), 12 U.S.C. §§ 1831d, for 

state-chartered banks.2

The NBA was created during the Civil War era to facilitate 

a national banking system, and it “constitutes a complete system 

for the establishment and government of national banks.” See 10 

Am. Jur. 2d Banks and Financial Institutions § 119. Section 85 

of the NBA “authoriz[es] national banks to charge or receive 

interest on loans and discounts at the rate allowed by the laws 

of the state, territory, or district in which the bank is 

located, or at a rate based on the rate in effect at the Federal 

Reserve bank in the Federal Reserve district where the national 

2 Section 27 was added to the FDIA in 1980 by Section 521 of the 

Depository Institutions Deregulation and Monetary Control Act 

(“DIDA” or “DIDMCA”), Pub. L. No. 96-221, 94 Stat. 132 (1980). 

Some decisions cited in this Memorandum Opinion refer to the 

relevant statutory provision as Section 521 of DIDA or DIDMCA, 

while others refer to it as Section 27 of the FDIA. The Court 

uses “Section 27,” “Section 27 of the FDIA,” or “12 U.S.C. § 

1831d” in this Memorandum Opinion. 
11

bank is located.” Id. § 983. The Supreme Court has explained 

that Section 85 “sets forth the substantive limits on the rates 

of interest that national banks may charge,” and “if . . . the 

interest that [a] bank charge[s] . . . [does] not violate § 85 

limits, the statute unquestionably pre-empts any common-law or 

[state] statutory rule that would treat those rates as 

usurious.” Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 9 

(2003). Section 85 works in parallel with Section 86, which 

“sets forth the elements of a usury claim against a national 

bank, provides for a 2-year statute of limitations for such a 

claim, and prescribes the remedies available to borrowers who 

are charged higher rates and the procedures governing such a 

claim.” Id.

Before Congress passed Section 27 of the FDIA in 1980, 

national banks held a favored lending position vis-à-vis statechartered banks because the NBA preempted state law to allow 

national banks to charge as much or more interest than the 

state-chartered banks against which they competed. See Greenwood 

Trust Co. v. Massachusetts, 971 F. 2d 818, 826 (1st Cir. 1992) 

(explaining that “state institutions were at an almost 

insuperable competitive disadvantage” to national banks during 

the credit crunch of the late 1970s when interest rates were 

soaring but state institutions were constrained in the interest 

they could charge by state usury laws in ways national banks 
12

were not). To remedy that disparity, Congress passed Section 27 

for the express purpose of “prevent[ing] discrimination against 

State-chartered insured depository institutions, including 

insured savings bank.” See 12 U.S.C. § 1831d. 

Section 27 of the FDIA provides as follows: 

In order to prevent discrimination against 

State-chartered insured depository 

institutions, including insured savings 

banks, or insured branches of foreign banks 

with respect to interest rates, if the 

applicable rate prescribed in this subsection 

exceeds the rate such State bank or insured 

branch of a foreign bank would be permitted to 

charge in the absence of this subsection, such 

State bank or such insured branch of a foreign 

bank may, notwithstanding any State 

constitution or statute which is hereby 

preempted for the purposes of this section, 

take, receive, reserve, and charge on any loan 

or discount made, or upon any note, bill of 

exchange, or other evidence of debt, interest 

at a rate of not more than 1 per centum in 

excess of the discount rate on ninety-day 

commercial paper in effect at the Federal 

Reserve bank in the Federal Reserve district 

where such State bank or such insured branch 

of a foreign bank is located or at the rate 

allowed by the laws of the State, territory, 

or district where the bank is located, 

whichever may be greater.

12 U.S.C. § 1831d(a). What Section 27 does is allow statechartered banks to charge the maximum interest rates allowed in 

their home states or a prescribed federal interest rate, even to 

borrowers in states that set lower interest rate caps. And like 

Section 86 of the NBA, Section 27 subsection (b) provides for 
13

the remedies available against a state-chartered bank charging 

excessive interest rates. See 12 U.S.C. §1831d(b). 

4. Elevate’s Additional Assertions in Support of Removal 

Elevate also asserts that the Complaint “challenges 

Elevate’s lawful role as a service provider for state-chartered 

banks, a role also regulated by the FDIC.” See Notice of 

Removal, ECF No. 1 at 1. Elevate asserts that the FDIC requires 

state-chartered banks to “monitor and oversee Elevate in its 

role as a service provider.” Id. ¶ 34 (citing 12 U.S.C. § 

1802(d)(1); 12 C.F.R. § 337.12(a)). Elevate also contends that 

the Bank Service Company Act “allows the state-chartered banks 

to engage service providers like Elevate, by contract or 

otherwise, to perform bank-related function on behalf of the 

bank,” and service providers are “subject to regulation and 

examination by the FDIC as if the services were provided by the 

bank itself.” Id. ¶ 35 (citing 12 U.S.C. § 1867(c)). Elevate 

characterizes the FDIC as “establish[ing] the requirements and 

responsibilities concerning the state-charted banks’ riskmanagement procedures and due diligence in monitoring their 

third party service providers,” and “hold[ing] the statechartered banks responsible for their relationships with third 

party providers, including service providers like Elevate.” Id.

¶ 36 (citing 12 U.S.C. §§ 1813(q), 1813 (u); 12 U.S.C. § 

1867(c)(1)). Elevate further assets that the FDIC has issued 
14

guidance that addresses a number of the actions at issue in the 

District’s complaint. See id. ¶¶ 38-44.

Accordingly, Elevate removed this case to federal court on 

the basis that jurisdiction exists here based on “the preemptive 

effect of Section 27 . . . , on the one hand, and the need to 

interpret FDIC statutes, regulations, and guidance, on the 

other.” Def.’s Opp’n, ECF No. 23 at 2. 

II. Legal Standard

A civil action may be removed from state court to a federal 

district court only if the federal district court has original 

subject-matter jurisdiction over the case. 28 U.S.C. § 1441(a).

The Superior Court is considered a state court for removal 

purposes. Id. § 1451(a). “When it appears that a district court 

lacks subject matter jurisdiction over a case that has been 

removed from a state court, the district court must remand the 

case . . . , and the court’s order remanding the case to the 

state court whence it came ‘is not reviewable on appeal or 

otherwise.’” Republic of Venezuela v. Philip Morrris, Inc., 287 

F.3d 192, 196 (D.C. Cir. 2002) (citing 28 U.S.C. § 1447(c); 

quoting id. § 1447(d)). “Because of the significant federalism 

concerns involved, this Court strictly construes the scope of 

its removal jurisdiction.” Downey v. Ambassador Dev., LLC, 568 

F. Supp. 2d 28, 30 (D.D.C. 2008). “The party seeking removal of 
15

an action bears the burden of proving that jurisdiction exists 

in federal court.” Id.

The subject matter jurisdiction of federal district courts 

is limited and is set forth generally at 28 U.S.C. §§ 1331 and 

1332. Section 1331 confers jurisdiction on district courts over 

all civil actions arising under the Constitution, laws or 

treaties of the United States, or where the controversy presents 

a “federal question.” 28 U.S.C. § 1331. Absent diversity of 

citizenship, federal question jurisdiction is required to 

establish that the case could have originally been filed in 

federal court. Caterpillar Inc. v. Williams, 482 U.S. 386, 392 

(1987). “The presence or absence of federal-question 

jurisdiction is governed by the ‘well-pleaded complaint rule,’ 

which provides that federal jurisdiction exists only when a 

federal question is presented on the face of the plaintiff’s 

properly pleaded complaint.” Id. “[I]t is now settled law that a 

case may not be removed to federal court on the basis of a 

federal defense of pre-emption, even if the defense is 

anticipated in the plaintiff’s complaint, and even if both 

parties concede that the federal defense is the only question 

truly at issue.” Id. at 393. 

There are two situations in which federal question 

jurisdiction may exist even where, as here, a complaint alleges 

only state law claims. First, Congress may “so completely pre-
16

empt a particular area that any civil complaint raising [a] 

select group of claims is necessarily federal in character.” 

Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987). This

doctrine of “complete preemption” is an “independent corollary” 

to the well-pleaded complaint rule that “converts an ordinary 

state common-law complaint into one stating a federal claim for 

purposes of the well-pleaded complaint rule.” Caterpillar Inc., 

482 U.S. at 392. “Once an area of state law has been completely 

preempted, any claim purportedly based on that pre-empted state 

law is considered, from its inception, a federal claim, and 

therefore arises under federal law.” Id. Second, in a “special 

and small category of cases[,] . . . federal jurisdiction over a 

state law claim will lie if a federal issue is: (1) necessarily 

raised, (2) actually disputed, (3) substantial, and (4) capable

of resolution in federal court without disrupting the federalstate balance approved by Congress.” Gunn v. Minton, 568 U.S. 

251, 258 (2013) (citing Grable & Sons Metal Prods., Inc. v. 

Darue Eng’g & Mfg., 545 U.S. 308 (2005)). 

III. Analysis

Elevate, which bears the burden of showing the Court has 

jurisdiction, maintains that removal to federal court is proper 

in this case because: (1) Section 27 of the FDIA completely 

preempts state law claims involving loans originated by a statechartered bank; and (2) the significant federal issues doctrine 
17

provides an independent ground for removal because federal law 

must be interpreted and considered to determine the validity of 

the District’s claims. See Def.’s Opp’n, ECF No. 23 at 6-23. 

The Court disagrees, and, for the reasons set forth below, 

concludes that this Court does not have jurisdiction to hear 

this case. The case shall be remanded to the Superior Court. 

A. The FDIA Does Not Completely Preempt the District’s State

Law Claims Against Elevate, a Non-Bank Entity

Complete preemption exists only when a federal statute’s 

“pre-emptive force is so ‘extraordinary’ that it ‘converts an 

ordinary state common-law complaint into one stating a federal 

claim for purposes of the well-pleaded complaint rule.’” 

(quoting Metro. Life Ins. Co., 481 U.S. at 65). It is “not . . .

a crude measure of the breadth of the preemption (in the 

ordinary sense) . . . but rather . . . a description of the 

specific situation in which a federal law . . . substitutes a 

federal cause of action for a state cause of action, thereby 

manifesting Congress’s intent to permit removal.” Schmeling v.

NORDAM, 97 F.3d 1336, 1339 (10th Cir. 1996).

The Supreme Court has found only three statutes have the 

requisite extraordinary preemptive force to support complete 

preemption: (1) Section 301 of the Labor Management Relations 

Act, 29 U.S.C. § 185, see Avco Corp. v. Machinists, 390 U.S. 557 

(1968); (2) the Employee Retirement Income Security Act of 1947, 
18

29 U.S.C. § 1001 et seq., see Metro. Life Ins. Co. v. Taylor,

481 U.S. 58 (1987); and, as relevant here, (3) Sections 85 and 

86 of the NBA, 12 U.S.C. §§ 85-86, see Beneficial Nat. Bank v. 

Anderson, 539 U.S. 1 (2003). In Beneficial, the Supreme Court

held that Sections 85 and 86 of the NBA provide the exclusive 

cause of action for usury claims against national banks, and 

there is no such thing as a state law claim of usury against a 

national bank; thus, the NBA completely preempts such state law 

claims. 539 U.S. at 11.

Elevate argues that just as Sections 85 and 86 of the NBA 

provide the exclusive cause of action for usury claims against 

national banks, Section 27 of the FDIA provides the exclusive 

cause of action for usury claims against state-chartered banks. 

See Notice of Removal, ECF No. 1 ¶ 60. Section 85 of the NBA and 

Section 27 of the FDIA allow national and state-chartered banks, 

respectively, to charge interest at rates set by the banks’ home 

states, even if those rates are illegal in the states in which 

the loans are made. See 12 U.S.C. §§ 85-86; 12 U.S.C. § 1831d.

Elevate reasons that because Section 27 was “enacted to create 

parity and fair competition between state-chartered and national 

banks” and it “mirror[s] the language of Sections 85 and 86,”

the Supreme Court’s complete preemption analysis in Beneficial

is “equally applicable to claims against federally-insured, 

state-chartered banks arising under Section 27.” Def.’s Opp’n, 
19

ECF No. 23 at 14-15. Therefore, because the usury claims in the 

District’s complaint relate to loans originated by FinWise, a 

Utah-chartered bank, and Republic, a Kentucky-chartered bank, 

Elevate argues Section 27 provides the exclusive cause of action 

for those claims. See id. at 13. 

For the reasons set forth below, the Court concludes that 

even if Section 27 of the FDIA completely preempts state law 

usury claims against state-chartered banks, it does not 

completely preempt the District’s claims against Elevate, a nonbank entity. Accordingly, Section 27 does not provide a basis 

for removal of this action to federal court. 

1. If Section 27 Completely Preempts State Law Usury 

Claims, It Only Applies to Claims Against StateChartered Banks

The Supreme Court has not addressed whether Congress 

intended Section 27 of the FDIA to completely preempt state law 

usury claims against state-chartered banks insured by the FDIC, 

as Sections 85 and 86 of the NBA do for state law usury claims 

against national banks. To date the Supreme Court has chosen not 

to address this issue, see Vaden v. Discover Bank, 556 U.S. 49, 

56 n.4 (2009) (citing Beneficial by way of comparison) (“Our 

disposition of this case makes it unnecessary to take up the 

question of § 27(a)’s preemptive force generally or in the 

particular context of Discover’s finance charges. We therefore 

express no opinion on those issues.”); and a split currently 
20

exists among circuit courts that have addressed the issue, 

compare In re Cmty. Bank of N. Va., 418 F.3d 277, 295 (3d Cir. 

2005) (holding complete preemption exists with respect to 

Section 27, and state law usury claims against state-chartered 

bank were appropriately removed to federal court) and Discover 

Bank v. Vaden, 489 F.3d 594, 606-07 (4th Cir. 2007) (same), 

rev’d on other grounds, 556 U.S. 49 (2009), with Thomas v. U.S. 

Bank N.A., 575 F.3d 794, 797-800 (8th Cir. 2009) (holding 

Section 27 does not completely preempt the field of state law 

usury claims against state-chartered banks, and such claims are 

not appropriate for removal to federal court).

The Court need not reach whether Congress intended Section 

27 to provide the exclusive cause of action for usury claims 

against state-chartered banks because, even if it does, Elevate 

is not a state-chartered bank. Indeed, the District is not the 

first plaintiff to bring a state law consumer protection 

enforcement action against a non-bank entity that allegedly 

“rents” a bank to provide predatory, high-interest loans to 

consumers, nor is Elevate the first defendant to try to remove 

this type of case to federal court on a jurisdictional theory of 

complete preemption. The vast majority of courts that have been 

confronted with the issue have concluded that the NBA and FDIA 

do not completely preempt state law usury claims against a non-
21

bank.3 The Court concludes the same here: because the only usury 

claims in this case are against a non-bank entity, Section 27 is 

not implicated and cannot provide a basis for removal 

3 See Cmty. State Bank v. Knox, 523 F. App’x 925, 929-30 (4th 

Cir. 2014) (finding that “claims against the non-bank loan 

servicers fall squarely outside the scope of the FDIA” and thus 

“no federal subject-matter jurisdiction exists” over the 

claims); In re Cmty. Bank of N. Va., 418 F.3d 277, 297 (3d Cir. 

2005) (finding that “removal was improper” where the complaint 

asserted no claims against a national or state-chartered 

federally insured institution); Meade v. Marlette Funding LLC, 

Civ. Action No. 17-cv-00575-PAB-MJW, 2018 WL 1417706, at *2 (D. 

Colo. Mar. 21, 2018) (remanding case after noting that “[c]ourts 

in this Circuit and others have repeatedly held that when claims 

are asserted against a non-bank entity, complete preemption does 

not apply and remand to state court is warranted, even if the 

non-bank defendant has a close relationship with a state or 

national bank”); Meade v. Avant of Colorado, LLC, 307 F. Supp. 

3d 1134, 1142-43 (D. Colo. 2018) (adopting and affirming a 

magistrate’s recommendation to remand the case to state court 

where the plaintiff “ha[d] not asserted a claim against a state 

bank”); West Virginia v. CashCall, Inc., 605 F. Supp. 2d 781,

783 (S.D. W. Va. 2009) (“[B]ecause the State only asserts state 

law claims against CashCall, a non-bank entity, the claims do 

not implicate the FDIA, the FDIA does not completely preempt the 

state-law claims, and there are no federal questions on the face 

of the Complaint.”); Flowers v. EZPawn Okla., Inc., 307 F. Supp. 

2d 1191, 1196, 1204 (N.D. Okla. 2004) (denying removal in a case 

involving state law usury claims against defendants alleged to 

have “enter[ed] into a ‘sham’ relationship” with state-chartered

banks “for the purpose of claiming federal preemption and 

evading state usury, fraud and consumer protection laws” because 

“[n]o claims have been brought against [the state-chartered

bank] in this lawsuit”); Colorado ex rel. Salazar v. ACE Cash 

Express, Inc., 188 F. Supp. 2d 1282, 1285 (D. Colo. 2002) (“The 

Complaint strictly is about a non-bank’s violations of state 

law. It alleges no claims against a national bank under the 

NBA.”).
22

jurisdiction.4 Elevate’s arguments to the contrary are 

unavailing, for the reasons set forth below. 

2. The District’s Claims Are Directed at Elevate, a NonBank Entity, Not the State-Chartered Banks 

Although the sole defendant is Elevate, and the Complaint 

contains no usury claims against FinWise or Republic, Elevate 

nonetheless urges the Court to find that Section 27 completely 

preempts the District’s claims because the claims are all “based 

on or aimed at” high interest rates charged on loans originated 

by state-chartered banks. Def.’s Opp’n, ECF No. 23 at 17. 

Elevate maintains that it is merely a service provider used by 

FinWise and Republic and that the District’s decision to bring 

this suit against it, rather than the banks, is a “creative 

pleading artifice” that “cannot [be used] to avoid the 

preemptive effect of Section 27 on removal.” Id.

a. The Complaint Adequately Alleges that 

Elevate is the True Lender

Courts that have addressed the complete preemption question 

in rent-a-bank cases like this one have wrestled with similar

arguments, which non-bank entity defendants routinely make. In 

response, courts “have found it necessary to determine whether 

4 Because Section 27 is not implicated by the District’s 

Complaint that includes state law usury claims against only a 

non-bank entity, Elevate’s argument that the District could have 

“opt[ed] out of the preemptive effect[] of Section 27” is 

irrelevant. See Def.’s Opp’n, ECF No. 23 at 15. 
23

the claims were actually directed against a federally or statechartered bank,” such that the preemptive force of federal 

banking law applies to the claims despite the fact that the 

claims were only brought against non-bank entities. See 

CashCall, 605 F. Supp. 2d at 785 (citing cases). Numerous courts 

have concluded that where a complaint “sufficiently allege[s]” a 

non-bank entity is the true lender of the allegedly usurious 

loans, the claims are properly directed at the non-bank entity 

rather than the state-chartered banks that originated the loans.

See Marlette, 2018 WL 1417706, at *3 (“In circumstances where a 

plaintiff has sufficiently alleged that the non-bank entity is 

the true lender, courts have consistently come to the conclusion 

that complete preemption does not apply, ‘even if the non-bank 

entity worked closely with the bank to administer loans.’”); see 

also CashCall, 605 F. Supp. 2d at 787 & n.9 (remanding case 

where “the State alleges that CashCall is the de facto lender,” 

even though “there [wa]s a factual question as to the identity 

of the true lender”); Flowers, 307 F. Supp. 2d at 1206 

(remanding case where “the Court has only the petition which 

. . . alleges throughout that EZCorp through EZPawn is the true 

lender."). Because the allegations in the Complaint govern, and 

as these cases persuasively demonstrate, the Court cannot 

exercise removal jurisdiction if “the allegations are 

insufficient for the undersigned to conclude as a matter of law 
24 

that [FinWise and Republic] and not [Elevate] [are] the true 

lender[s].” See Flowers, 307 F. Supp. 2d at 1206 (observing that 

“the Court must take the allegations as true for purposes of the 

motion to remand”); see also Colon v. Ashby, 314 F. Supp. 3d 

116, 120 (D.D.C. 2018). 

Upon careful review of the alleged facts, and in 

consideration of the relevant persuasive case law, the Court is 

satisfied that the District’s claims are directed at Elevate, 

not FinWise and Republic. The Court cannot conclude, as a matter 

of law based on the allegations in the Complaint, that FinWise 

and Republic are the true lenders of the allegedly usurious 

loans marketed by Elevate and sold by Elevate to District 

residents. See Flowers, 307 F. Supp. 2d at 1206.5 Moreover, the 

5 Elevate’s argument that the “true lender rule” issued by the 

Office of the Comptroller of the Currency (“OCC”) in October 

2020 is relevant to the Court’s analysis of this issue, see 

Pl.’s Notice of Supp. Authority, ECF No. 27 at 1; is now moot. 

The rule, which pertained only to loans issued by national 

banks, purported “to determine when a national bank or Federal 

savings association (bank) makes a loan and is the ‘true 

lender,’ including in the context of a partnership between a 

bank and a third party, such as a marketplace lender.” See 

National Banks and Federal Savings Association as Lenders, 85 

Fed. Reg. 68742 (Oct. 30, 2020), ECF No. 27-1 at 2. “Under this 

rule, a bank makes a loan if, as of the date of origination, it 

is named as the lender in the loan agreement or funds the loan.” 

Id. However, Congress passed a Congressional Review Act 

resolution rescinding the rule, and President Biden signed the 

resolution into law on June 30, 2021, noting that repealing the 

“true lender rule” would “protect borrowers against predatory 

lenders” that operated “so called ‘rent-a-bank’ schemes” to 

“prey on veterans, seniors, and other unsuspecting borrowers. 

White House, Remarks by President Biden Signing Three 
25

District’s suit targets several of Elevate’s practices—such as 

deceptive marketing, misrepresentations, and failure to obtain a 

money lending license—and not just the provision of loans with 

interest rates that exceed the District’s usury caps. This

further convinces the Court that the District’s suit aims to 

enforce the District’s consumer protection laws against, and 

protect District residents from, Elevate specifically. See Knox, 

523 F. App’x at 929-30.

Here, the District alleges that Elevate not only provides 

the website, marketing, analytics, software, and underwriting 

models for the Rise and Elastic loans—for which it holds the 

intellectual property rights—but it also “has the predominant 

economic interest in the loans it provides to District consumers 

via FinWise and Republic.” Compl., ECF No. 1-2 ¶¶ 1, 17, 20, 21, 

22. The District alleges Elevate receives revenue through two 

Cayman Islands special purpose vehicles—EE SPV and ESPV—that 

purchase a 96% interest in the receivables for the Rise loans 

and a 90% interest in the receivables for the Elastic loans, 

respectively. Id. ¶¶ 41, 42, 73, 75. According to the District, 

Congressional Review Act Bills into Law: S.J.Res.13; S.J.Res.14; 

and S.J.Res.15 (June 30, 2021 17:37), 

https://www.whitehouse.gov/briefing-room/speechesremarks/2021/06/30/remarks-by-president-biden-signing-threecongressional-review-act-bills-into-law-s-j-res-13-s-j-res-14-

and-s-j-res-15/. Accordingly, the OCC’s “true lender rule” no 

longer has force or effect, and the Court need not consider it.
26

in 2019, Elevate’s revenue from the Rise loans totaled over $390 

million and its revenue from the Elastic loans totaled over $248 

million. Id. ¶¶ 40, 72. The District alleges that Elevate: (1) 

directs and controls the funding of the Rise and Elastic loans, 

id. ¶¶ 37, 38, 69, 70, 71; (2) takes the risk of bad loans, 

including by providing credit protections to EE SPV and ESPV, 

id. ¶¶ 44, 45, 76, 77; and (3) acts as a servicer for the Rise 

and Elastic loans, through its subsidiaries, including by 

reconciling the accounts, posting payments and other credits to 

the accounts, and providing periodic billing statements, id. ¶¶ 

47, 79.

There are many similarities between the rent-a-bank scheme 

that the District alleges Elevate orchestrated and the schemes 

allegedly perpetuated by non-bank defendants in the cases where 

courts have found that complaints sufficiently alleged that nonbank entities were the true lenders of the loans at issue. Each 

of these alleged rent-a-bank schemes is unique, but the Court is 

persuaded that the allegations in the Complaint are similar 

enough for the Court to conclude that the District has 

sufficiently alleged that Elevate is the true lender of the Rise 

and Elastic loans. 

For example, in Avant and Marlette, the State of Colorado’s 

banking administrator alleged that non-bank entities “provide[d] 

the website through which customers appl[ied] for [state-
27

chartered bank] Loans, . . . develop[ed] the criteria for making 

loans, . . . decide[d] which applicants w[ould] receive the 

loans, and [defendant] (or its affiliates) purchase[d] the loans 

within two days after they [we]re made.” Marlette, 2018 WL 

1417706, at *3 (quoting Avant, 307 F. Supp. 3d at 1147). The 

Avant decision also points out that the non-bank entity in that 

case “service[d] and administere[d] the loans, [bore] all the 

risk on the loans in the event of default, pa[id] all the legal 

fees and expenses related to the lending program, retain[ed] 99% 

of the profits on the loans, and indemnifie[d] [the bank] 

against all claims arising from [the bank’s] involvement in the 

loan program.” Avant, 307 F. Supp. at 1147. In both cases, the 

district court found that “plaintiff sufficiently alleges that 

defendant is the ‘true lender.’” Marlette, 2018 WL 1417706, at 

*3 (citing Avant, 307 F. Supp. 3d at 1147). 

Furthermore, in Flowers, the plaintiff alleged that 

defendant EZPawn made payday loans through checks drawn from a 

bank, but EZPawn and its affiliate EZCorp, not the bank, 

together “carrie[d] out all interaction with the borrowers, 

accept[ed] the ultimate credit risk, collect[ed] and pocket[ed] 

virtually all of the finance charges and fees, and own[ed] and 

control[led] the branding of the loans which [we]re available 

only at its pawnshops.” 307 F. Supp. 2d at 1205. Despite the 

defendants’ argument that they merely acted as servicers for 
28

loans made by a state-chartered and federally insured bank, the 

court concluded that the allegations did not support a finding 

that the bank was the true lender and the petition’s state law 

claims were directed against the non-bank defendants. Id.

Finally, in CashCall, the State of West Virginia alleged 

that defendant CashCall, Inc. marketed loans to consumers as an 

agent of a South Dakota-chartered bank, the bank approved and 

directly funded the loans, and CashCall would purchase the loans 

three days later pursuant to the terms of an agreement with the 

bank. 605 F. Supp. 2d at 783. Based on these facts, the court 

found that the usury claims in the complaint were directed only 

against CashCall. Id. at 786. 

The Court is unpersuaded by Elevate’s argument that the 

“lending program arrangements at issue [in Avant and Marlette]

are inapposite to the service provider structure that exists 

between Elevate and the Banks.” See Def.’s Opp’n, ECF No. 23 at 

20-21. Though Elevate contends it is only a service provider, 

the scheme alleged in the Complaint is similar to the “lending 

program arrangements” in Avant and Meade (as well as the other 

cases discussed above). Compare Avant, 307 F. Supp. 3d at 1147 

(“Avant develops the criteria for making the loans”), with 

Compl. ¶ 20 (“Elevate also provides the analytics, software, and 

underwriting models to FinWise and Republic for the provision of 

Rise and Elastic loans”); compare Avant, 307 F. Supp. 3d at 1147 
29

(“Avant (or its affiliates) purchases the loans within two days 

after they are made by WebBank . . . [and] retains 99% of the 

profits on the loans”), with Compl. ¶¶ 41, 73 (“[A] Cayman 

Islands special purpose vehicle that operates for the financial 

benefit of Elevate[] has purchased a 96% interest in the 

receivables for the [Rise] loans . . . [and] a [different] 

Cayman Islands special purpose vehicle that operates for the 

financial benefit of Elevate[] has purchased a 90% interest in 

the receivables from the {Elastic] loans . . . . These 

receivables generate income for Elevate.”); compare Avant, 307 

F. Supp. 3d at 1147 (“[Avant] services and administers the 

loans”), with Compl. ¶¶ 47, 79 (“Elevate, through one of its 

subsidiaries, acts as the servicer for the {Rise and Elastic} 

loans. Its duties as a servicer include reconciling the 

accounts, posting payments and other credits to the accounts, 

and providing periodic billing statements.”); compare 307 F. 

Supp. 3d at 1147 (“[Avant] bears all the risk on the loans in 

the event of default”), with Compl. ¶¶ 45, 77 (“Elevate provides 

credit protection to [the Cayman Islands special purpose 

vehicles] against [Rise and Elastic] loan losses. This credit 

protection places the risk of losses on Elevate.”). 
30 

b. The Court Need Not Resolve Factual Disputes 

at This Juncture 

The Court acknowledges that Elevate disputes a number of 

the District’s factual allegations and presents additional facts 

to counter the District’s true-lender allegations. See Def.’s 

Opp’n, ECF No. 23 at 9-10.6 But the Court need not resolve those 

factual disputes on a motion for remand. See Colon v. Ashby, 314 

F. Supp. 3d 116, 120 (D.D.C. 2018) (“[T]he court must assume all 

of the facts set forth by plaintiff to be true and resolve all 

uncertainties as to the state substantive law in favor of the 

plaintiff” on a motion for remand); see also Flowers, 307 F. 

Supp. 2d at 1206 (stating that “the Court must take the 

allegations as true for purposes of the motion to remand,” and 

noting that the court had before it only the plaintiff’s 

6 Elevate submits the following: (1) FinWise and Republic 

“review[] and approve[] all marketing materials and campaigns 

and determine[] the underwriting strategies and score cutoffs 

used in processing applications”; (2) FinWise and Republic 

“define all program parameters and provide full compliance 

oversight over all aspects of their respective programs as 

required by federal law”; (3) Elevate does not own or purchase 

any interest in the Rise or Elastic loans after the banks 

originate them; (4) the banks retains ownership of the accounts 

associated with their respective credit products at all times; 

(5) EE SPV and ESPV purchase participation interest in the loans 

after origination, which it explains is “distinct from” 

purchasing the loan itself because it “grants the purchaser the 

right to receive amounts derived from repayment of the loan,” 

but “ownership of the loan and the customer account remain with 

the originating bank”; (6) an Elevate subsidiary provides credit 

protection to investors in EE SPV and ESPV; and (7) Elevate does 

not have an ownership interest in EE SPV or Elastic SPV. Def.’s 

Opp’n, ECF No. 23 at 9-10. 
31 

petition and not all relevant agreements between the non-bank 

entity and bank); Dandy v. Wilmington Fin., Inc., Civ. No. 08-

1027 JCH/GBW, 2010 WL 11493721, at *7 (D.N.M. May 3, 2010) 

(where a non-bank entity argued it merely facilitated allegedly 

illegal residential mortgage loans on behalf of a federal 

savings bank, the court observed that “this contention merely 

raises a factual question and cannot create federal 

jurisdiction”). This is consistent with precedent in this 

circuit that holds “federal jurisdiction is disfavored for cases 

that are ‘fact-bound and situation-specific’.” Bender v. Jordan, 

623 F.3d 1128, 1130 (D.C. Cir. 2010).7

The Court is also unpersuaded by Elevate’s suggestion that 

Krispin v. May Department Stores, 218 F.3d 919 (8th Cir. 2000) 

and Discover Bank v. Vaden, 489 F.3d 594 (4th Cir. 2007), rev’d 

on other grounds, 556 U.S. 49 (2009), direct the Court to 

conduct a searching factual analysis that looks beyond the face 

of the Complaint to determine the real party in interest in this 

case. See Def.’s Opp’n, ECF No. 23 at 23. In Krispin, the Court 

7 Elevate’s reference to this Court’s decision in State Farm 

Bank, F.S.B. v. District of Columbia, 640 F. Supp. 2d 17, 24 

(D.D.C. 2009)—in support of its argument that the Court must 

conduct a real party interest analysis that looks beyond the 

face of the pleadings—is misplaced. See Def.’s Opp’n, ECF No. 23 

at 19 & n.9. That case had nothing to do with whether the Court 

had jurisdiction over the case upon removal from Superior Court; 

instead, the Court was analyzing whether federal law preempted 

the District’s mortgage regulations when ruling on cross-motions 

for summary judgment. See State Farm, 640 F. Supp. 2d at 18. 
32

of Appeals for the Eighth Circuit (“Eighth Circuit”) considered 

whether state law usury claims against a department store that 

entered credit agreements with customers but later assigned 

those accounts to a bank, while still maintaining a role in the 

collection process and purchasing the receivables from the bank 

on a daily basis, were claims directed at the bank rather than 

the defendant store. 218 F.3d at 923-24. The court found that 

the bank was the real party in interest, having determined that 

“in these circumstances . . .. it makes sense to look to the 

originating entity (the bank), and not the ongoing assignee (the 

store), in determining whether the NBA applies” and completely 

preempts the state law usury claims. Id. at 924. Courts have 

since correctly questioned whether “this factual determination 

based on state law should be made in the first instance by a 

federal court on removal rather than the state court.” Flowers, 

307 F. Supp. 2d at 1206. Relatedly, Krispin was decided in a 

different procedural posture, as the Flowers court noted: “the 

Eighth Circuit and the district court decided the issue on a 

motion for summary judgment, finding there was no genuine issue 

of material fact that the bank was the real party in interest.” 

Id. Finally, as the District correctly points out, numerous 

courts have distinguished Krispin on its facts, noting that 

there was no dispute that the bank was a wholly-owned subsidiary 
33

of the department store. See Pl.’s Reply, ECF No. 25 at 13-14 & 

n.9 (citing cases). 

Vaden is likewise unpersuasive. There, the Court of Appeals 

for the Fourth Circuit (“Fourth Circuit”) held that a bank was 

the real party in interest to a counterclaim in a lawsuit where 

a loan servicer sued to collect credit card debt and the debtor 

filed counterclaims asserting violations of state usury laws

against the loan servicer. 489 F.3d at 603. The Fourth Circuit 

observed that an analysis of the real party in interest was 

necessary given the “unique and complex relationship among the 

parties” and to prevent plaintiffs from “artfully plead[ing] 

state law claims against a non-bank defendant and thus frustrate 

Congress’ intent that certain causes of action are always 

federal.” Id. at 601 & n.5. 

Elevate fails to address a subsequent Fourth Circuit 

decision in a case that more closely resembles this case than 

Vaden does. See Knox, 523 F. App’x 925. In Knox, the Fourth 

Circuit called into question whether its own decision in Vaden

remains good law and, in any event, found Vaden unpersuasive 

based on the distinguishing facts evident on the face of the 

complaint. See Knox, 523 F. App’x at 929-30 (“Even if [the real 

party in interest analysis] remains intact after the Supreme 

Court’s reversal, see Vaden II, 556 U.S. 49, 129 S. Ct. 1262, we 

would not reach the same result in the present case.”). The 
34 

Fourth Circuit concluded that “determination of which party 

controlled the loan terms is far less integral here than in 

Vaden,” noting that the claims in the complaint “specifically 

target several practices of the loan servicers” and “unpaid 

debts are not at issue.” Id. 

For the same reasons the Fourth Circuit in Knox found its 

earlier decision in Vaden unpersuasive when evaluating whether a 

non-bank entity could claim protection from state law consumer 

protection and usury claims by invoking Section 27’s preemptive 

force, so too does this Court. As in Knox, the District’s claims 

“do not merely challenge certain terms of the loans, but instead 

specifically target several practices of the loan servicers.” 

Id. at 929. As the District points out, of the four counts in 

the District’s Complaint, three “do not turn on usury at all.” 

Pl.’s Reply, ECF No. 25 at 9-10.8 Where, as here, a state targets 

several of a non-bank entities’ practices in a consumer 

8 Count I concerns Elevate’s alleged deceptive marketing of the 

Rise and Elastic loans, alleging that Elevate violated the CPPA 

by “misrepresenting the cost and legality of the loans and 

failing to disclose the interest rates of its loans.” Id. at 10 

(citing Compl., ECF No. 1-2 ¶¶ 80-88). Count II concerns 

Elevate’s alleged failure to disclose the true costs of the Rise 

and Elastic loans, in violation of the CPPA’s prohibition on 

unfair and unconscionable practices. Id. (citing Compl., ECF No. 

1-2 ¶¶ 89-92). Count IV concerns Elevate’s alleged failure to 

obtain a money lending license in the District, and whether 

Elevate is in violation of the CPPA even if it is not the true 

lender of the Rise and Elastic loans. Id. at 10-11 (citing 

Compl., ECF No. 1-2 ¶¶ 100-103). 
35

protection enforcement action, “[t]he totality of the Complaint 

shows that the State’s suit is directed against a single, 

specific entity violating a host of state laws including the 

usury law,” and that entity is the non-bank, not the bank. See

CashCall, 605 F. Supp. 2d at 786. Indeed, in contrast to Vaden 

and Krispin, where customers sought money damages caused by 

specific usurious fees, when a state brings a consumer 

protection enforcement action it is “seeking relief from the 

harmful conduct of a specific entity . . . that does not benefit 

from the privileges conferred by the FDIA, [and thus] the fact 

that a state-chartered bank might be the true lender responsible 

for alleged usurious loans is less significant . . . . [T]he 

bank is not the targeted entity and cannot provide the sought 

relief even if it turns out to be the real lender; the non-bank 

entity would remain the target.” Id. at 788; see also Knox, 523 

F. App’x at 930. That is the situation here—the District’s suit 

seeks to protect District residents from Elevate based on 

several practices that are allegedly harmful to its consumers, 

and that remains true even if Elevate is not in fact the true 

lender of the Rise and Elastic loans. See Pl.s Reply, ECF No. 25 

at 9-11. 

Further counseling against conducting a fact-intensive 

analysis at this stage to determine the true lender of the Rise 

and Elastic loans is that even if the Superior Court were to 
36

conclude on remand that Elevate is not, in fact, the true 

lender, that “will not result in [FinWise’s or Republic’s] 

liability or regulation under state laws, but will merely 

relieve [Elevate] of liability under those laws.” CashCall, 605 

F. Supp. 2d at 787. If the Superior Court instead concludes that 

Elevate is the true lender, as the District alleges, Elevate may 

be liable under the District’s usury laws. But in either 

situation, the state-chartered banks’ rights to make loans and 

charge FDIA-permitted interest rates in the District will not be 

affected. Id.

Accordingly, based on the facts alleged in the Complaint, 

the Court rejects Elevate’s argument that the District’s state 

law claims amount to claims against FinWise and Republic that 

are completely preempted by Section 27 of the FDIA. While the 

Superior Court may conclude on remand that FinWise and Republic 

are in fact the true lenders of the Rise and Elastic loans, that 

factual dispute does not create federal jurisdiction here. 

3. The FDIC’s “Pervasive” Regulatory Oversight of StateChartered Banks Does Not Give Rise to Complete 

Preemption Jurisdiction

In arguing that Section 27 completely preempts the 

District’s state law claims, Elevate repeatedly invokes the 

FDIC’s “pervasive regulatory scheme” and “detailed framework for 

“overseeing the relationship between regulated state banks and 

their third-party service providers.” See Notice of Removal, ECF 
37

No. 1 at 1; Def.’s Opp’n, ECF No. 23 at 18, 20, 21-22. Elevate 

points to the Bank Service Company Act, which “allows statechartered banks to engage service providers like Elevate, by 

contract or otherwise, to perform bank-related function on 

behalf of the bank” and “subject[s] [service providers] to 

regulation and examination by the FDIC as if the services were 

provided by the bank itself.” Id. ¶ 35 (citing 12 U.S.C. § 

1867(c)). Elevate also points to formal and informal guidance 

issued by the FDIC relevant to the relationship between statechartered banks and their service providers, including for 

“services performed in connection with a bank lending program by 

technology-enabled service providers like Elevate.” See Def.’s 

Opp’n, ECF No. 23 at 17-18 (citing Notice of Removal, ECF No. 1 

¶¶ 34-42). Finally, Elevate points to final rules issued by the 

FDIC and OCC in June 2020 “formalizing the valid-when-made 

doctrine, which holds that a loan that was valid when made will 

not be rendered usurious by a subsequent transfer.” Id. at 21-22

& n.11 (citing Federal Interest Authority, 85 Fed. Reg. 44146 

(July 22, 2020); Permissible Interest on Loans That Are Sold, 

Assigned, or Otherwise Transferred, 85 Fed. Reg. 33530 (June 2, 

2020)). Elevate argues that this “federal banking scheme 

encompasses and encourages Elevate’s activities as a service 

provider and allows Elevate to enable banking operations under 

the purview of the FDIA and FDIC’s supervision without regard to 
38

state usury laws.” Id. (citing Notice of Removal, ECF No. 1 ¶¶ 

34-44, 62-67). 

The District, on the other hand, invokes the Dodd-Frank 

Wall Street Reform and Consumer Protection Act (“Dodd-Frank 

Act”) to argue that Section 27 should not be interpreted as 

completely preempting state law usury claims against non-bank 

entities. See Pl.’s Mot., ECF No. 15 at 20 & n.6. The District 

contends that the Dodd-Frank Act clarified that the statute 

should not “be construed as preempting, annulling, or affecting 

the applicability of State law to any subsidiary, affiliate, or 

agent of a national bank.” Id. (citing 12 U.S.C. §§ 25b(b)(2), 

€, (h)(2)). Elevate disagrees. See Def.’s Opp’n, ECF No. 23 at 

17 n.7. 

These arguments, however, are not particularly relevant to 

the issue of complete preemption, pursuant to which the Court 

determines whether it can exercise removal jurisdiction because 

Congress intended for a law’s preemptive force to be “so 

extraordinary” that it replaces state law entirely and permits 

removal, not whether federal law preempts state law in the 

ordinary sense. See Caterpillar Inc., 482 U.S. at 392-93 

(distinguishing ordinary federal preemption, which is raised as 

a defense to allegations in a plaintiff’s complaint and cannot 

serve as the basis for removal, from the “complete pre-emption” 

doctrine); see also Lehmann v. Brown, 230 F.3d 916, 919-920 (7th 
39

Cir. 2000) (“[T[he phrase ‘complete preemption’ has caused 

confusion . . . by implying that preemption sometimes permits 

removal. Unfortunately, ‘complete preemption’ is a misnomer, 

having nothing to do with preemption and everything to do with 

federal occupation of a field . . . . State law is ‘completely 

preempted’ in the sense that it has been replaced by federal 

law—but this happens because federal law takes over all similar 

claims, not because there is a preemption defense.”). 

While Section 27 may have the requisite preemptive force to 

permit removal of state law usury claims against state-chartered

banks, neither the District nor Elevate has cited any cases that 

would support a conclusion that Congress intended Section 27 of 

the FDIA to completely preempt state law claims against non-bank 

entities that are nowhere mentioned in the plain language of the 

statue simply because a “detailed regulatory framework” 

addresses the relationship between state-chartered banks and 

non-bank entities. Elevate’s discussion of Marquette National 

Bank of Minneapolis v. First of Omaha Service Corp., 439 U.S. 

299, 304-05 (1978) and related cases is inapposite. See Notice 

of Removal, ECF No. 1 at ¶¶ 63-67. Marquette is not a removal 

case and does not address complete preemption. Likewise, Sawyer 

v. Bill Me Later, Inc., 23 F. Supp. 3d 1359 (D. Utah 2014) did 

not discuss complete preemption or removal jurisdiction, despite 

Elevate’s claim that it “appl[ied] complete preemption to claims 
40 

involving agents of state-chartered banks.” See Notice of 

Removal, ECF No. 1 ¶ 67. In fact, the court in Sawyer explicitly 

distinguished that case from removal cases, noting that “a case 

relevant to questions of complete preemption in which a court 

must consider whether a case can be properly removed to federal 

court based on federal question jurisdiction [is] inapposite 

here where the case is already properly in federal court.” 

Sawyer, 23 F. Supp. 3d at 1369. 

Accordingly, the Court concludes that Elevate’s arguments 

concerning the FDIC’s “pervasive regulatory scheme” governing 

state-chartered banks and their service providers do not affect 

the Court’s finding that Section 27 of the FDIA does not 

completely preempt the District’s state law usury claims against 

Elevate.9 As such, the Court holds that Section 27 of the FDIA 

does not completely preempt the District’s state law claims 

against Elevate, a non-bank entity, and it does not provide a 

basis for this Court to exercise removal jurisdiction. 

9 That is not to say that ordinary preemption is not a viable 

defense under the FDIA—Elevate is “free to raise preemption as a 

defense to this action in Superior Court, and ultimately seek 

federal-court review by petitioning the Supreme Court for 

certiorari if [Elevate] lose[s] in Superior Court.” See U.S. 

Airways Master Exec., Council, Air Line Pilots Ass’n, Int’l. v. 

Am. W. Master Exec. Council, 525 F. Supp. 2d 127, 135 (D.D.C. 

2007). 
41

B. The Significant Federal Issue Doctrine Is Not A Basis For 

Removal 

Having concluded that federal law does not completely 

preempt the District’s state law claims against Elevate in this 

consumer protection enforcement action, the Court now turns to 

Elevate’s second asserted basis for removal: the significant 

federal issues doctrine. See Notice of Removal, ECF No. 1 ¶¶ 76-

90. For the Court to exercise removal jurisdiction over a purely 

state law claim under this narrow exception to the well-pleaded 

complaint rule, a federal issue would have to be “(1) 

necessarily raised, (2) actually disputed, (3) substantial, and 

(4) capable of resolution without disrupting the federal-state 

balance approved by Congress.” Gunn v. Minton, 568 U.S. 251, 258 

(2013) (citing Grable, 545 U.S. 308). This so-called Grable

exception is extremely rare and only creates federal subjectmatter jurisdiction in a “special and small” category of cases. 

See Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 

677, 701 (2006). As courts in this district have observed, “[i]t 

takes more than a federal element to establish federal question 

jurisdiction under the Grable framework, . . . and courts have 

confined Grable to those rare state-law claims posing a contextfree inquiry into the meaning of federal law.” Flavell v. Int’l 

Bank for Reconstruction and Dev., Civ. Action No. 20-623 (CKK), 

2021 WL 1146301, at *7 (D.D.C. Mar. 25, 2021) (quoting 
42

Washington Consulting Grp., Inc. v. Raytheon Tech. Servs. Co., 

LLC, 760 F. Supp. 2d 94, 101-102 (D.D.C. 2011)). 

Elevate contends that the Court may exercise federalquestion subject-matter jurisdiction over this case because of 

the “significant issues of federal law that must be resolved to 

determine the viability of the Complaint’s state law claims.”

Notice of Removal, ECF No. 1 ¶ 80. Elevate seems to contend that 

the “significant issues of federal law” the require resolution 

here are “the federal statutes, regulations and regulatory 

guidance applied to state-chartered banks and their service 

providers.” Id. ¶ 80. “Whether the fact pattern in this case is 

subject to the ‘true lender’ analysis set forth in the 

Complaint,” Elevate argues, ”and whether that analysis can 

displace the longstanding and robust federal regulatory scheme 

that authorizes the exportation of interest rates and the use of 

service providers by state-chartered banks will involve, in the 

words of Grable, the ‘validity,’ ‘construction’ and ‘effect’ of 

federal law.” Id.

Elevate’s arguments are a misapplication of Grable because

the District’s claims do not “necessarily raise a stated federal 

issue.” Grable, 545 U.S. at 314. In Grable, the plaintiff 

asserted that because a federal statue requiring notice of the 

seizure of property was not complied with, plaintiff should have 

good title to certain seized land. Id. at 311. That is, the 
43

plaintiff’s action was based on a federal statute. The same is 

true of the D.C. Circuit case on which Elevate relies. See 

Bender v. Jordan, 623 F.3d 1128, 1130 (D.C. Cir. 2010) (federal 

stock savings association asserted that because a federal 

regulation did not entitle two former directors and the former 

CEO to indemnification of expenses arising from a shareholder 

securities law suit, the individuals were in breach of contract 

for their failure to repay legal fees). Conversely, the District 

does not rely on any federal statute or regulation to bring its 

claims. Instead, the District’s action has been brought despite

Elevate’s assertion that the FDIA, FDIC, and federal regulation 

permit the conduct that the District alleges Elevate undertook 

in violation of the District’s laws. See, e.g., Notice of 

Removal, ECF No. 1 ¶ 81 (“The Complaint alleges that the 

structure of the loan transactions and the interest rate they 

implement are unlawful under state law without regard to the 

federal statutes, regulations or guidance, or the FDIC’s 

regulatory oversight.” (emphasis added)). Elevate’s arguments 

are properly understood as an assertion of a federal preemption 

defense, which cannot serve as the basis for federal subjectmatter jurisdiction. See Animal Legal Def. Fund v. Hormel Foods 

Corp., 249 F. Supp. 3d 53, 58 (D.D.C. 2017) (citing Caterpillar 

Inc., 482 U.S. at 393) (a federal preemption defense “by its 

very nature is not ‘necessarily raised’ by Plaintiff’s 
44

Complaint, and indeed it is black letter law that ‘a case may 

not be removed to federal court on the basis of a federal 

defense, including the defense of pre-emption”). 

Moreover, the main issue in this case is the identity of 

the true lender of the Rise and Elastic loans. The true-lender 

question is substantially factual, and the Superior Court is 

well equipped to handle it, as many state courts have done in 

the similar rent-a-bank cases cited throughout this Memorandum 

Opinion. Conversely, substantial and necessarily raised federal 

issues warranting federal subject-matter jurisdiction are ones

“posing a context-free inquiry into the meaning of federal law.” 

See Flavell, 2021 WL 1146301, at *7. They are not “fact-bound 

and situation-specific.” See McVeigh, 547 U.S. at 701. In the 

only case the parties identified that involves both an alleged 

rent-a-bank scheme and an assertion of federal jurisdiction 

under the Grable exception, the district court concluded that 

the issues surrounding the alleged true lender and whether 

preemption would apply merely raised a factual question, rather 

than a legal question that called for the interpretation of 

federal statutes, making removal on this basis improper. See 

Dandy, 2010 WL 11493721, at *7. The same is true here. 

Because no substantial federal issues are necessarily 

raised by the District’s Complaint, the Court concludes that the 
45

significant federal issues doctrine does not provide a basis for 

federal subject-matter jurisdiction in this case. 

IV. Conclusion

Accordingly, for the reasons set forth above, the Court 

GRANTS the District’s Motion to Remand to State Court. This case 

shall be remanded to Superior Court. An appropriate order 

accompanies this Memorandum Opinion. 

SO ORDERED. 

Signed: Emmet G. Sullivan

United States District Judge

July 15, 2021