Implications of Madden v. Midland Funding

July 21, 2016

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 from the Second Circuit involving the preemption of state usury laws. We previously discussed how the Second Circuit’s decision, if allowed to stand by the U.S. Supreme Court (the “Supreme Court” or “Court”), could significantly impair the practices of not only marketplace lenders, but also the practices of all purchasers of debt who seek to enforce the interest rates on loans purchased from FDIC-insured banks. On June 27, the Supreme Court denied certiorari in the Madden case and therefore, the Second Circuit’s decision, which in essence held that the purchaser of a loan from a national bank was not entitled to federal preemption of New York’s usury laws, will remain in effect.

Read "Implications of Madden v. Midland Funding."