Cadwalader attorneys discussed the implications of the Supreme Court's denial of a petition for certiorari in Midland Funding LLC v. Madden (No. 15-610), a case involving the application of state usury laws to nonbank assignees. In Madden, the U.S. Court of Appeals for the Second Circuit held that the application of state usury laws to nonbank assignees is not preempted by Section 85 of the National Bank Act. Instead, such assignees remain subject to state usury limits. The attorneys stated that the denial upholds this "unusual – and troubling – decision" by the Second Circuit. The attorneys also stated:
The Second Circuit's decision suggests that a nonbank assignee of a bank-originated loan might not be able to collect the amount of interest contracted for by the originating national bank if the rate of interest exceeds the usury rate otherwise applicable to the assignee.
Click here to view the Cadwalader memorandum authored by Scott Cammarn, Joseph Beach, Bruce Bloomingdale, Chris Gavin and Nathan Bull.
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