Category Archives: New York

Appellate Court Permits Use of Parol Evidence to Support Usury Defense

Two New York debtors entered into a promissory note with a lender in which the lender agreed to lend $35,000 to the debtors and the debtors promised to repay the lender $35,000 plus 15% interest. When the debtors failed to make … Continue reading

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Erroneous Interest Calculation Dooms Criminal Usury Defense – Part II

As previously discussed, the method used to calculate an interest rate is a critical part of any usury action. This was again highlighted in a recent a New York state case. The plaintiff had filed an action to recover on a loan it had … Continue reading

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Supreme Court Requests Solicitor General’s Views on Madden v. Midland Funding

Today the Supreme Court issued an invitation to the Solicitor General to file a brief expressing the government’s views on the 2nd Circuit’s decision in Madden v. Midland Funding. The Court’s request indicates that the Court will likely grant Midland’s … Continue reading

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Estoppel Argument Successfully Counters Usury Defense

The plaintiff made a loan to the defendant, a family friend, using funds that were to pay her daughter’s college tuition. The plaintiff alleged the defendant was a real estate expert that needed the funds to develop an affordable housing project. The … Continue reading

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Borrowers’ Equitable Recoupment Claim Fails, Criminal Usury Claim Survives

Plaintiff-borrowers filed a complaint against the defendant-lender alleging that the lender had made four usurious loans to the borrowers. The borrowers sought to recoup allegedly usurious interest payments they had paid on a satisfied loan and to void three outstanding loans. … Continue reading

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Defendants Neglect to Allege Usurious Intent, Criminal Usury Defense Fails

A creditor purchased two convertible promissory notes from a company. The notes bore interest at 8% and 10%, respectfully. At the creditor’s option, the notes could be converted into unrestricted common stock of the company. After the purchase, the creditor elected to convert … Continue reading

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Court Finds Usurious Late Fees Unenforceable

Though usury caps are only applicable to loan transactions, courts often reference usury rates when determining the reasonableness of fees charged on amounts due. A fee that significantly exceeds the applicable usury rate may be found to be an unenforceable penalty … 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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Madden v. Midland Funding, LLC: What Does it Mean for Alternative Small Business Lending?

Here’s a link to an article I wrote for deBanked’s July/August magazine issue.

Posted in Civil Usury, Federal Court, New York, Newsury | Comments Off on Madden v. Midland Funding, LLC: What Does it Mean for Alternative Small Business Lending?

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

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