Online Lenders Shouldn’t Get Mad Over Madden
The Second Circuit’s surprising decision in Madden v. Midland Funding caused consternation within the financial services industry. There, the Madden Court held that the National Bank Act’s pre-emption of state usury law did not apply to consumer debt sold by banks to third parties. Under the Second Circuit’s ruling, third-party buyers could not be certain of loan values, potentially making consumer finance markets less liquid. This decision immediately sparked concerns from the alternative finance industry,…
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