A divided panel of the U.S. Court of Appeals for the Tenth Circuit has ruled in Walker v. BOKF, National Association that the extended overdraft fees charged by BOKF were not “interest” under the National Bank Act (NBA). The Tenth Circuit’s ruling on what it called “an issue of first impression in this circuit” follows similar rulings by the First and Fifth Circuits.… Continue Reading
New York reduces judgment rate on consumer debts to 2%
On December 31, 2021, New York Governor Hochul signed into law S5724-A which reduces the annual rate of interest on judgments arising out of a consumer debt where the defendant is a natural person from 9% to 2%. The laws take effect 120 days from the Governor’s signature, which is April 30, 2022.… Continue Reading
FDIC files summary judgment motion in lawsuit challenging its “Madden-fix” rule
The FDIC has filed a motion for summary judgment in the lawsuit filed by the Attorney Generals of six states and District of Columbia to set aside the FDIC’s “Madden-fix” rule. The filing also includes the FDIC’s opposition to the summary judgment motion filed by the AGs.
The lawsuit is pending before the same California federal district court judge (Judge Jeffrey S.… Continue Reading
FDIC issues “Madden fix” rule addressing state bank loan interest rates after assignment
The FDIC has issued its widely anticipated final rule resolving the uncertainty caused by the Second Circuit’s Madden v. Midland Funding decision. Madden held that a non-bank entity that purchased charged-off loans from a national bank could not charge the same rate of interest on the loans as the national bank was able to charge based on its authority under Section 85 of the National Bank Act (“NBA”).… Continue Reading
CA Governor signs laws setting Financing Law rate cap, automatic deposit account exemption from levy
Last week, California Governor Newsom signed into law AB 539, which makes significant amendments to the California Financing Law (CFL), and SB 616, which creates a new exemption from levy for deposit account funds.
The Governor signed AB 539 on October 10. Most importantly, the CFL amendments limit the rate of interest that may be imposed on loans of $2,500 – $10,000 to 36% plus the federal funds rate (which is currently hovering around 2%) per annum.… Continue Reading
California bill capping consumer loan interest rates clears Assembly
Last week, by a vote of 60 to 4 (with 16 not voting), the California Assembly cleared AB 539, which would change several aspects of the California Financing Law (CFL), including by setting new interest rate caps, imposing new rules governing loan duration, and prohibiting prepayment penalties. For example, while the CFL does not set a maximum interest rate on loans of $2,500 or more, AB 539 would cap the interest rate at 36% plus the federal funds rate on loans of $2,500 or more but less than $10,000. … Continue Reading
Senator Sanders to introduce bill imposing 15% or lower consumer credit interest rate cap
Senator Bernie Sanders recently announced that he will be introducing a bill, the “Loan Shark Prevention Act,” that would amend the Truth in Lending Act (15 U.S.C. 1606) (TILA) to establish a “national consumer credit usury rate” that would limit the APR “applicable to any extension of credit” to the lesser of “15 percent on unpaid balances, inclusive of all finance charges” or “the maximum rate permitted by the laws of the State in which the consumer resides” (Sanders Bill). … Continue Reading