Supreme Court Denies Madden v. Midland Funding Cert. Petition

The Supreme Court has denied Midland Funding’s petition for certiorari. As a result, the 2nd Circuit’s holding that nonbank assignees are not entitled to NBA preemption if they are not acting on behalf of a national bank will remain binding law on the three states that make up the 2nd Circuit. The case, however, is still on ongoing. It will now remanded to the district court to decide whether or not to enforce the parties’ Delaware choice of law provision. If the provision is enforced, Midland should be successful in arguing that the interest rate it charged was not usurious. In its brief, the Solicitor General argued that there’s a good possibility that the district court will decide that issue in Midland’s favor which would result in the case being dismissed.

However, even if the case were dismissed, the 2nd Circuit’s holding on NBA preemption will still be binding. Assignees of national banks litigating in the circuit must now convince lower courts to disregard the 2nd Circuit’s decision or sufficiently distinguish the facts of their own cases such that district court judges feel comfortable not following Madden’s holding.

About Patrick Siegfried

Patrick Siegfried is the author of the Usury Law Blog. Patrick is a practicing attorney in Bethesda, Maryland. Patrick’s work focuses on issues regarding alternative small business financing. He can be reached at
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