The 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.