Unlock Agrees to Colorado Consumer Credit Compliance

Unlock Partnership Solutions Inc., operating as Unlock Technologies, has agreed to comply with Colorado's consumer credit laws and provide restitution to affected homeowners, as announced by the Colorado attorney general's office on June 24. The state's Attorney General Phil Weiser determined that Unlock's home equity agreements (HEAs) function as consumer credit transactions, necessitating adherence to the Uniform Consumer Credit Code (UCCC), including the Colorado Consumer Equity Protection Act (CEPA), rate caps, mandatory disclosures, and state licensing requirements.

Unlock's HEA model involves providing homeowners with a lump-sum payment in exchange for a portion of their home's future value, irrespective of appreciation or depreciation. State regulators concluded these contracts operate as loans, subject to interest rate limitations and consumer protections, aligning with a growing trend among state and federal regulators examining similar shared-equity or home equity investment products. This settlement mandates that Unlock adhere to Colorado lending laws, including CEPA and UCCC rate caps, and obtain necessary state licenses before resuming operations within Colorado.

As part of the agreement, Unlock is required to issue restitution payments directly to consumers. As of June 24, the AG's office reported that Unlock identified $283,375 in restitution owed to 125 Colorado homeowners whose contracts exceeded state interest rate limits. This amount is anticipated to increase as more loans are finalized in the future. Attorney General Weiser emphasized the importance of transparency and fair practices for Colorado homeowners engaging with their home equity, stating the agreement ensures restitution and future compliance with state lending laws.