ICBA Files Amicus Brief in Regulatory Preemption Case
ICBA and other financial trade associations filed an amicus brief in the Madden v. Midland Funding case in support of the defendants’ petition for rehearing before the U.S. Court of Appeals for the Second Circuit. The case concerns the issue of federal regulatory preemption and whether non-national bank entities (such as a debt collector) that are assigned loans from a national bank are entitled to National Bank Act protection from state law usury claims.
The financial trade associations’ members, “like the rest of the lending community in the United States, depend on a stable market for loans of all types, including a secondary market that allows banks to sell loans and thereby extend additional credit,” the brief states. “The panel decision in this case seriously threatens the ability of Amici’s members to exercise their statutory and regulatory authority to make and sell loans, in conflict with longstanding precedent and fundamental principles of federal preemption.”
Because federal preemption is important to community banks across the nation, particularly those that regularly purchase and sell loans, ICBA wanted to express its opinion in support of the proposition that preemption rights are not extinguished when a bank sells or assigns a loan to another party. Read Amicus Brief.