November 2, 2015 Alert: SFIG to Support Expected Supreme Court Petition in Madden vs. Midland Case

The Structured Finance Industry Group (“SFIG”) has engaged Sidley Austin LLP to file an amicus curiae brief in support of an expected Midland Funding LLC petition with the Supreme Court requesting judicial review of Second Circuit Court of Appeals decision in Madden v. Midland Funding.

On May 22, 2015, the Second Circuit Court of Appeals ruled that a debt buyer, who purchased defaulted credit card accounts from a national bank, is not entitled to collect interest under the National Bank Act at the rate set in the cardholder agreement. On June 26th, SFIG, along with the Securities Industry and Financial Markets Association, filed an amicus curiae brief on behalf of the defendant, asking the Second Court of Appeals for a rehearing, which was denied.

The outcome of Madden v. Midland has far reaching implications for the securitization of consumer loans, especially those funded through marketplace lending channels. If the Second Court’s decision is upheld, then industry participants would need to evaluate the applicability of state usury laws for loans included in a securitization.

To learn more about SFIG’s amicus curiae review process, please contact Alyssa.Acevedo@sfindustry.org.

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