Legal Seminar, Denver, CO

Madden v. Midland: Second Circuit Decision • On appeal, the Second Circuit reversed and remanded.

• Found that, under the Barnett Bank conflict preemption standard, applying state usury laws against Midland would not "significantly interfere with [the national bank's] ability to exercise its powers under the [NBA].” • Because Midland and the originating banks were entirely separate entities and because the originating banks had no ongoing interest in the loan, Midland was not entitled to the exportation doctrine – Distinguished Krispin and Phipps

For Discussion Purposes Only

Madden v. Midland: After the Second Circuit

Petition for Cert. • Midland brief relied extensively on valid-when-made principle: argued that the “valid when made” doctrine was incorporated into Section 85 of the NBA • Solicitor General, joined by OCC, reiterated this argument but ultimately recommended that the Supreme Court deny certiorari

Remand Decision • In February 2017, the District court issued its remand decision • Held: applying Delaware law per the account agreement would violate a fundamental public policy of New York – criminal usury statute limits interest to 25% per year.

For Discussion Purposes Only