A Momentous Court Decision May Hurt Bank Lending Powers

July 22, 2015 at 4:26 pm Leave a comment

Written by: Barkley Clark and Mike Lochmann

In a recent decision that has sent shockwaves through the banking industry, a federal appellate court in New York has ruled that, for usury purposes, non-bank buyers of charged-off credit card debt are not allowed to step into the shoes of a national bank that originated and sold the debt. We think the ruling in Madden v. Midland Funding, LLC (May 25, 2015) is flat wrong because it contradicts 182 years of well-settled law, disrupts secondary markets, and interferes with the core powers of a national bank to sell its loans to third parties.

This article was first published at BankDirector.com. Please click here to view the full article. 

Entry filed under: Client Alerts, Financial Institutions, Regulatory Guidance. Tags: , , , .

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