Flex Loan Legislation Sparks Wave of Lawsuits By Advance Financial

Adam Friedman of the Tennessee Lookout reports that Advance Financial has emerged as the dominant plaintiff in Tennessee’s consumer lending courts. It leveraged its Flex Loan product to file tens of thousands of lawsuits since 2015.

The company’s lending practices have imposed significant financial burdens on low- and moderate-income borrowers, who often find themselves entangled in protracted legal proceedings while their debt rapidly accumulates.

Despite paying back more than the original loan amount, they face court judgments nearly three times the borrowed amount.

The Flex Loan was introduced after Tennessee lawmakers approved legislation that enabled higher loan limits and daily fees, thereby circumventing previous payday lending restrictions.

Unlike traditional payday loans, Flex Loans allow lenders to charge interest exceeding 250% annually, recover attorneys’ fees through litigation, and perpetuate open-ended balances.

Advance Financial lobbied for the legislation, arguing that the loans were a slightly more expensive alternative to traditional payday credit.

The company expanded rapidly following the product’s approval. It opened more than 100 locations across Tennessee and generated hundreds of millions in revenue. Advance Financial’s growth coincided with political contributions to state and federal candidates, and regulatory shifts that reduced oversight of high-interest lending.

In practice, Flex Loan litigation has disproportionately affected borrowers with limited legal resources, who often default by missing court appearances or failing to respond to summonses.

The company frequently secures default judgments, sometimes adding substantial fees and interest, resulting in wage garnishments and extended repayment obligations.

Legal advocacy has occasionally mitigated these outcomes, but most borrowers lack access to counsel, making it difficult to challenge aggressive debt collection tactics.

The article points out that Tennessee’s experience illustrates the legislative savvy of the high-cost lending industry. Borrowers face weak court enforcement of consumer protections, while procedural mechanisms that shape the enforceability of open-ended credit agreements favor lenders.