No friend of the decision, this lawyer explicates a surprising ruling on 3rd party debt collectors:
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The Second Circuit’s ruling that federal preemption is available only when debt is held by a national bank, but not after sale of the debt to a non-bank investor, is a troubling precedent with respect to sales of bank-originated loans. The Madden decision is particularly troubling due to its assertion that application of various local state law usury claims to non-bank investors would not significantly interfere with a national bank’s ability to exercise its powers under the Bank Act. Unless reversed, Madden could significantly disrupt and cause restructuring of the secondary market for loans originated by national banks, including the manner in which bank syndicated credits and securitization platforms operate. Madden also has the potential to affect the valuation of bank loans already held by non-bank investors.Well, Deus ex machina! A conflict between circuit courts... on up goes the argument.
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