The Madden v. Midland case has been a topic many lenders have been following closely for over two years. Our last update was in June 2016 when the Supreme Court denied a petition to hear the case which left the case unresolved. Now bills are being introduced in hopes to fix the ambiguity around this case.
For a historical perspective you can read our coverage of the case at the below links:
- Supreme Court Denies Petition to Hear Madden v Midland (June, 2016)
- An Update on Madden vs. Midland Funding (May, 2016)
- Madden Tells SCOTUS That Marketplace Lenders Should Not Worry About Madden (February, 2016)
- Madden 2015 Has Nothing to Do With Football (August, 2015)
An article in American Banker this week from Adam Levitin, professor of law at Georgetown University, provides his perspective on what the bills mean for the case. Levitin expresses concern over the bills, believing that the bills being introduced are overly broad and will facilitate predatory lending.
Nat Hoopes, Executive Director of the Marketplace Lending Association disagreed with Levitin’s assessment. Here is what he had to say:
These bills are strongly pro-consumer. They will help ensure that consumers can continue to refinance their higher interest rate debts, saving consumers significant amounts of money through lower interest costs. Furthermore, these bills clearly cannot facilitate predatory lending because they do not change the rate or terms on which any entity in this country (regulated at the state or federal level) can lawfully lend money. The language of the bills simply reaffirms one of the fundamental principles of contract law — that valid loan contracts can be sold on the secondary market.