Madden v. Midland Appeal RejectedAugust 13, 2015 | By: Sean Murray
Alternative lenders might have reason to lose a little bit of sleep going forward. The United States Court of Appeals for the Second Circuit shot down a request for a rehearing of Madden v. Midland. The original ruling stated that third party debt buyers are not covered under National Bank Act pre-emption. That decision had major ramifications for alternative lenders who often rely on banks to issue the loans and then immediately sell them to the “lender” to book and service.
You can read a legal brief of the case here.
Lending Club’s CEO recently addressed this case and he explained that he believed his company would be unaffected because of their choice of law provision.
And Patrick Siegfried, Esq, the author of the Usury Law Blog, has previously said that Madden v. Midland may be the start of new usury Litigation.
Last modified: August 13, 2015
Sean Murray is the founder of deBanked, an 11-year veteran of the merchant cash advance industry, a casual Lending Club and Prosper note investor, the co-founder of Daily Funder, an alternative lending speaker, consultant, writer, and enthusiast. Connect with me on LinkedIn or follow me on twitter.