American First Finance is a defendant in an American First Finance lawsuit on three fronts: a California class action alleging it issues unlicensed high-interest loans dressed up as retail installment contracts, a Maryland class action making similar usury claims that recently defeated the company’s attempt to force arbitration, and consolidated federal litigation over a data breach at its banking partner FinWise Bank that exposed personal information for roughly 689,000 AFF customers.
The California Class Action Over Disguised Loans
In October 2021, Sacramento County resident Larry Facio filed a class action against AFF in the U.S. District Court for the Northern District of California. The case, Facio v. American First Finance, Inc. (No. 3:21-cv-08184), argues that AFF issues consumer loans while labeling them as retail installment sales contracts assigned from merchants after the sale.
Facio says he bought wheels and tires and was never told at the register that he was entering a financing deal with AFF. According to the complaint, a seven-page security agreement generated by AFF set an annual percentage rate of 144.59% on his $2,292 purchase. He alleged he never saw the document, never signed it, and that a retailer employee blocked him from viewing the computer screen during the electronic signing.
The suit describes AFF’s model this way: AFF signs up retailers, provides them with marketing materials and application forms, and uses an online portal to generate security agreements at checkout. AFF alone decides who qualifies, sets the financing terms, and handles collections. The complaint argues that calling these deals “assignments” from the merchant is a legal fiction meant to sidestep California’s lending laws.
The core legal claim is that AFF operates as an unlicensed lender in California. Although AFF registered as a foreign corporation in the state in 2018, plaintiffs allege it never obtained the license required under the California Finance Lenders Law. The suit seeks to void the agreements, recover principal and interest paid, and enjoin further lending in the state. It also cites the California Consumers Legal Remedies Act, the Unfair Competition Law, and the Unruh Act.
The case has not been decided on the merits. The court stayed it in January 2022, and in May 2022 a magistrate judge granted AFF’s motion to compel arbitration.
The Maryland Class Action and the Arbitration Reversal
The second active case is Trimble v. American First Finance, LLC (No. RDB-24-0969) in the U.S. District Court for the District of Maryland. Kaitlyn Trimble says she bought furniture through AFF partner retailer American Freight at a listed price of $1,779.94 and ended up paying $2,457.87 over five months. Her putative class action claims AFF’s rental-purchase agreements are structured to evade Maryland’s usury laws, and cites the Maryland Consumer Loan Law and the Maryland Rental-Purchase Agreement Act.
The fight so far has been about arbitration. AFF moved to send the case to private arbitration under its consumer agreement. Trimble argued that a separate clause letting AFF unilaterally change any contract terms in writing made the promise to arbitrate illusory. If AFF can rewrite the rules whenever it wants, she argued, there is no real agreement.
Senior District Judge Richard D. Bennett initially sided with AFF on February 21, 2025, treating the arbitration provision as a separate, enforceable contract that the modification clause did not reach.
Weeks later, the Fourth Circuit decided Johnson v. Continental Finance Company, LLC, holding that a nearly identical change-in-terms clause made an arbitration agreement illusory under Maryland law because the lender could escape its obligations at will. On April 15, 2025, Judge Bennett granted Trimble’s motion for reconsideration, vacated his earlier order, denied AFF’s motion to compel arbitration, and lifted the stay. The court concluded that the modification clause reached the arbitration provision even without being expressly incorporated, and that no valid agreement to arbitrate had ever been formed.
The ruling matters beyond this case. Under Johnson, courts rather than arbitrators decide whether an arbitration contract was ever formed, and clauses allowing one-sided modification without meaningful advance notice fail for lack of consideration. AFF uses arbitration provisions in all of its consumer agreements, so within the Fourth Circuit the strategy no longer blocks class claims as easily.
The FinWise Bank Data Breach Litigation
A separate wave of lawsuits arose from a data breach at AFF’s banking partner, FinWise Bank. On May 31, 2024, a former FinWise employee who had been terminated accessed personal data belonging to approximately 689,000 AFF customers. The exposed information included names, addresses, dates of birth, Social Security numbers, and account numbers tied to FinWise installment loans, AFF lease-to-own accounts, and retail installment sales agreements.
FinWise did not discover the breach until June 18, 2025, more than a year later. Notification letters went to affected customers on July 29, 2025, and FinWise offered one year of complimentary credit monitoring and identity theft protection.
Six class actions were filed and consolidated in the U.S. District Court for the District of Utah under the lead case Minter v. FinWise Bank. Plaintiffs named both FinWise and AFF, alleging negligence, breach of contract, and unjust enrichment. Specific claims include failure to encrypt stored data and failure to implement adequate safeguards. The consolidated complaint seeks more than $5 million in relief along with a court order requiring FinWise to encrypt collected data and to provide lifetime credit monitoring for affected customers. FinWise has said it will “defend any such lawsuits vigorously” and predicted related losses “will not be material.”
The Rent-a-Bank Model at the Heart of the Claims
The usury cases share a common theory. AFF partners with FinWise Bank, a Utah-chartered bank supervised by the FDIC, to originate installment loans. Utah-chartered banks are exempt from the interest rate caps most states impose on non-bank lenders, and the National Consumer Law Center has placed AFF on its High-Cost Rent-a-Bank Loan Watch List, identifying the FinWise partnership as a mechanism to issue installment loans at rates up to 155% APR. The plaintiffs’ argument, sometimes called the “true lender” theory, is that AFF is the real lender because it bears the economic risk and controls the lending process, so state usury laws should apply regardless of the bank’s name on the paperwork.
A June 2022 report from The Capitol Forum indicated that AFF’s practices could draw Federal Trade Commission scrutiny and referenced an “expanded ongoing state AG investigation.” The Consumer Federation of America has urged the FDIC to downgrade FinWise Bank’s Community Reinvestment Act rating over its fintech lending partnerships, including with AFF.
What This Means If You Have an AFF Account
AFF places an arbitration provision in every consumer-facing agreement. Consumers can reject it by following the opt-out procedure in the contract within a set window. In the Trimble case, the court noted the window was 30 days from signing. Outside the Fourth Circuit, that clause has generally worked to move disputes out of court, as it did in Facio.
Complaints filed outside of litigation follow recognizable patterns. AFF is not accredited by the Better Business Bureau and has received hundreds of complaints through that platform. Common grievances include interest rates consumers say were never disclosed at the point of sale, with some reporting effective rates above 200%, and balances that grew far beyond the original purchase price. One complaint cited a $1,100 loan reaching $6,500. Others describe unauthorized or excessive withdrawals from bank accounts, overdrafts caused by continued debits after requests to stop, and collection calls, texts, and emails from multiple phone numbers.
On credit reporting: AFF reports account information to TransUnion, Data X, and Clarity Services, with updates at least monthly. Consumers who believe information has been reported inaccurately can submit a written dispute to AFF’s Dallas office, and the company is required to investigate and respond within 30 days. AFF does not report lease-to-own accounts in Arizona, California, or Florida, and as of January 2024, new lease-to-own accounts are not reported to credit bureaus at all.
None of the pending class actions has produced a judgment on the merits. Facio is in arbitration. Trimble is back in federal court after the arbitration ruling was vacated. The FinWise breach cases are in early consolidated proceedings in Utah.