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Interest Rates Madden v Midland Funding Usury

Morgan Lewis - All Things FinReg

“Madden Fix” Rules Withstand a Key Test: What Happens Next

More than six years after it was decided, the practical consequences of the US Court of Appeals for the Second Circuit’s Madden v. Midland Funding, LLC decision continue to diminish. The decision—which held that, under some...more

Orrick, Herrington & Sutcliffe LLP

The Madden Cloud is Lifting

In 2015, the Second Circuit’s decision in Madden v. Midland Funding, LLC, raised doubts about whether banks could transfer, sell, or assign their interests in consumer debt without triggering the enforcement of state usury...more

Ballard Spahr LLP

Three-state attack on the OCC’s “Madden fix” rule

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As previously reported, the OCC recently adopted a final rule (the “Madden fix”) designed to resolve the legal uncertainty created by the Second Circuit’s decision in Madden v. Midland Funding, which held that a non-bank that...more

BCLP

New York, California and Illinois Sue OCC to Block “Valid When Made” Rule

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Just two months ago, the Office of Comptroller of the Currency (“OCC”) addressed the “valid when made” doctrine and held that interest rates established on bank-originated loans remain valid even after the loan is transferred...more

Hudson Cook, LLP

Valid When Made 2.0: Attacking the Trusts

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Though a legal concept in existence in our nation’s jurisprudence for more than two hundred years, “valid when made” continues to be a heated topic of debate. Such controversy is to be expected given the treatment (or...more

Orrick, Herrington & Sutcliffe LLP

Madden Progeny Update

The Second Circuit’s decision in Madden v. Midland Funding, LLC was announced in 2015. Since that time, there have been a number of cases brought based on the Second Circuit opinion, as well as recent regulatory proposals...more

Cadwalader, Wickersham & Taft LLP

2019 Year in Review: Securitization Litigation and Regulation

There were significant developments in 2019 as courts continued to issue important decisions in this space and significant legislation impacting the residential mortgage-backed securities (“RMBS”) market came into effect.  A...more

Ballard Spahr LLP

Republican lawmakers urge OCC to address Madden through rulemaking

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The Republican members of the House Financial Services Committee have sent a letter to Comptroller of the Currency Joseph Otting urging the OCC to make action to address the uncertainty created by Second Circuit’s Madden...more

Ballard Spahr LLP

A response to Professor Levitin in defense of the OCC/FDIC amicus brief criticizing the Madden decision

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I don’t understand why Professor Levitin is attacking the OCC and FDIC for filing an amicus brief in an “obscure small business bankruptcy case to which a bank was not even a party.”  The brief was an exceptional piece of...more

Ballard Spahr LLP

OCC and FDIC file joint amicus brief urging Colorado federal district court to reject Madden

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The OCC and FDIC have filed a joint amicus brief in a Colorado federal district court arguing that the court should affirm the decision of a bankruptcy court holding that a non-bank loan assignee could charge the same...more

Cadwalader, Wickersham & Taft LLP

Cardholders Seek to Capital-ize on Madden

Last week, three Capital One cardholders filed a putative class action in the Eastern District of New York, Cohen v. Capital One Funding, LLC, alleging that the rates of interest they paid to a securitization trust unlawfully...more

Hudson Cook, LLP

What's Old is New Again: The Future of Bank Partnership Programs from Small Dollar Installment Loans to Mortgages to Everything

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Bank partnerships allow banks to offer loans to consumers and businesses by leveraging the resources of non-bank entities. The relationships between banks and their non-bank entity partners have existed for many years. In the...more

Troutman Pepper

Participation-Based 'Bank Sponsor' Lending Programs: Exploring the Advantages and Risks

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A watershed moment is “the exact moment that changes the direction of an activity or situation . . . a dividing point, from which things will never be the same.” The Second Circuit Court of Appeals’ 2015 decision in Madden v....more

Ballard Spahr LLP

State AGs urge Senators to reject bills addressing Madden and “true lender”

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A group of 21 state attorneys general have sent a letter to the Senate majority and minority leaders as well as to the chairman and ranking member of the Senate Banking Committee urging them to reject H.R. 3299 (“Protecting...more

Smith Debnam Narron Drake Saintsing & Myers,...

Madden Fix Bill Passes House, Faces Uncertain Fate In Senate

The United States House of Representatives passed H.R. 3299, commonly known as the “Madden fix” bill, by a vote of 245-171 on February 14, 2018. The bill, which is officially entitled “Protecting Consumers’ Access to Credit...more

Ballard Spahr LLP

House passes “Madden fix” bill

Ballard Spahr LLP on

By a vote of 245-171, the House passed H.R. 3299, the “Madden fix” bill (whose official title is the “Protecting Consumers’ Access to Credit Act of 2017.”) In Madden, the Second Circuit ruled that a nonbank that purchases...more

Orrick, Herrington & Sutcliffe LLP

Banks Seek Judgment That Loans Facilitated By Online Platforms Are Exempt From Colorado Lending Laws

In the last two weeks, WebBank and Cross River Bank—federally insured banks chartered in Utah and New Jersey, respectively—filed separate federal court actions (WebBank Complaint; Cross River Bank Complaint) against the...more

Troutman Pepper

Remand Decision in Madden v. Midland Funding Raises Questions Regarding Choice of Law Clauses in Consumer Loan Agreements

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A careful parsing of state laws should be done if a lender is relying on a choice of law to avoid states that have criminal usury statutes. On February 27, the U.S. District Court for the Southern District of New York...more

Orrick, Herrington & Sutcliffe LLP

Class Action Against Lending Club and WebBank Headed to Defeat

On Monday, a federal district court in the Southern District of New York granted a motion to compel arbitration in Bethune v. Lending Club Corporation, et al., a closely watched putative class action raising important issues...more

Troutman Pepper

The Solicitor General Weighs in on Madden v. Midland

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The Solicitor General’s brief argues the Second Circuit’s holding was incorrect, but does not recommend a grant of certiorari. On May 24, the U.S. Solicitor General and the Office of the Comptroller of the Currency...more

Dechert LLP

Implications of Madden v. Midland Funding

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In earlier client OnPoints, we have provided a comprehensive review of recent developments in the U.S. affecting the marketplace lending industry, including the potentially far-reaching Madden v. Midland Funding, LLC case...more

Sheppard Mullin Richter & Hampton LLP

Will Madden v Midland Disrupt Loan Sales and Platform Lending?

Where do marketplace lenders and secondary loan market participants find themselves on the issue of preemption of state usury laws after the June 27 denial of the petition for a writ of certiorari in Madden v. Midland by the...more

Ballard Spahr LLP

Installment Lender Using Bank Partner Model Needs Maryland License, Court of Appeals Rules

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The Maryland Court of Appeals, the state's highest court, in CashCall, Inc. et al. v. Maryland Commissioner of Financial Regulation, recently affirmed the judgment of the Court of Special Appeals (MCSA) directing CashCall to...more

Nutter McClennen & Fish LLP

Supreme Court Declines Review of Controversial Second Circuit Loan Purchase Decision

The United States Supreme Court recently declined to review the Second Circuit’s controversial opinion in Madden v. Midland Funding. As a result, uncertainty remains for non-bank purchasers of commercial paper on the...more

Polsinelli

Recent Supreme Court Action Creates Uncertainty in Financial Industry

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On June 27, 2016, the U.S. Supreme Court declined to review a Second Circuit Court of Appeals decision in the case of Madden v. Midland Funding, LLC. The High Court’s decision will allow a consumer class action against...more

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