NY Credit Card Securitization Class Action Misuses Madden

Law360 (July 18, 2019, 3:29 PM EDT) -- The U.S. Court of Appeals for the Second Circuit's decision in Madden v. Midland Funding LLC[1] is deservedly notorious. The Madden court erroneously held that state usury laws may prohibit a national bank’s assignee from enforcing the interest rate on a credit agreement that was valid under the law of the state in which the national bank is located.

This holding conflicts with the valid-when-made doctrine, long recognized in common law, as well as with key preemption principles stemming from a national bank’s Section 85 authority to charge interest up to the maximum permitted by its home state and the express...

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