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Second Circuit Denies Re-Hearing in Case Holding Debt Collector Could Not Charge Usurious Fees or Interest

US-CourtOfAppeals-2ndCircuit-SealThe U.S. Court of Appeals for the Second Circuit recently denied the defendant debt buyer’s petition for panel rehearing, or, in the alternative, for rehearing en banc, as to its ruling (discussed here) that federal National Bank Act preemption applicable to the loan originator does not allow a non-bank debt buyer to charge interest in excess of state usury limits.

In so ruling, the Second Circuit noted that, “[a]lthough it is possible that usury laws might decrease the amount a national bank could charge for its consumer debt in certain states (i.e., those with firm usury limits, like New York), such an effect would not ‘significantly interfere’ with the exercise of a national bank power.”

The Court did not address the “valid when made” doctrine.  Based on its ruling, the Court revived the consumer’s claims under the federal Fair Debt Collection Practices Act and state usury law. The Court also vacated the district court’s denial of the consumer’s motion for class certification.

A copy of the ruling denying the petition for rehearing is available at:  Link to Opinion.

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The attorneys of Maurice Wutscher are seasoned business lawyers with substantial experience in business law, financial services litigation and regulatory compliance. They represent consumer and commercial financial services companies, including depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, financial asset buyers and sellers, loss mitigation companies, third-party debt collectors, and other financial services providers. They have defended scores of putative class actions, have substantial experience in federal appellate court litigation and bring substantial trial and complex bankruptcy experience. They are leaders and influencers in their highly specialized area of law. They serve in leadership positions in industry associations and regularly publish and speak before national audiences.

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