Category Archives: Choice-of-Law

US District Court Holds Individual Guarantors Liable for Business Loan; Rejects Usury Challenge

An alternative small business lender provided a loan to a business located in Texas. The loan was guaranteed by two individuals.  The agreement contained a choice of law provision which provided that the transaction would be interpreted and governed by … Continue reading

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Massachusetts State Court Rejects Choice of Law Clause, Vacates Confessed Judgment

A business located in Massachusetts received financing from a small business funder. The parties’ agreement stated that in exchange for the financing provided, the funder would receive 15% of the business’ daily receipts which the funder would take by debiting $1,549 … Continue reading

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New York Court Enforces Choice of Law Provision Despite State Usury Law

An alternative small business lender provided a loan to a business. The business later filed suit against the lender in an attempt to void the loan agreement. The business alleged that the agreement violated New York’s criminal usury statute.  The … Continue reading

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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 … Continue reading

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When it Comes to Usury Law, Be Careful What You Ask For

In a previous post, Creditor Fails to Navigate Usury Law “Minefield”, Ordered to Refund $1.3 Million to Debtor, I discussed a recent bankruptcy case in California. In the case, a lender had filed a claim in the borrower-debtor’s bankruptcy case. The … Continue reading

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Federal Court Finds that State Usury Laws Are Not a Fundamental Public Policy of the United States

The enforcement of a choice of law provision where a claim of usury is involved often turns on whether the interest rate set by the chosen state would violate the usury laws of the forum state. If they would, the court must determine … Continue reading

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Multiple State Regulators Challenging Lender’s Use of Choice of Law Clause in Usury Enforcement Actions

A growing number of state regulators are challenging the use of choice of law provisions as a method of usury law compliance. On August 27, 2015, the Attorney General of North Carolina was granted an injunction against Western Sky Financial … Continue reading

Posted in Attorney General, Choice-of-Law, Civil Usury, Criminal Usury, D.C., Massachusetts, North Carolina, Tribal Immunity | Comments Off on Multiple State Regulators Challenging Lender’s Use of Choice of Law Clause in Usury Enforcement Actions

Regulator Disregards Choice of Law Provision in Usury Enforcement Action

Last Thursday, the Attorney General of North Carolina was granted an injunction against Western Sky Financial and CashCall prohibiting them from offering any loans to North Carolina consumers or collecting on any outstanding accounts in that state. The Attorney General argued … Continue reading

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New York Choice-of-Law Statute Helps Creditor Overcome Usury Defense

An alternative litigation financing company provided a California law firm with a $6 million dollar line of credit. When the law firm failed to pay, the finance company filed suit for breach of contract. The contract provided that the parties’ agreement would … Continue reading

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Alternative Small Business Lender Successfully Defends Against Usury Claim

A recent decision out of Westchester County, New York provides support for the enforceability of choice-of-law clauses in New York state where claims of usury are involved. The decision is especially noteworthy following the 2nd Circuit’s ruling in Madden v. Midland Funding, LLC, which … Continue reading

Posted in Choice-of-Law, Criminal Usury, National Bank Act, New York, State Court | Comments Off on Alternative Small Business Lender Successfully Defends Against Usury Claim