Walter Zalenski Quoted in Law360 Article, "High Court Pass Not The End of Usury Law Question"Walter E. Zalenski
Walter Zalenski was quoted in Evan Weinberger's Law360 article, "High Court Pass Not The End of Usury Law," on June 27, 2016.
The U.S. Supreme Court elected not to review a Second Circuit decision allowing New York usury law to trump federal statute in a case against a debt buyer, but a U.S. government brief in the case could result in the question coming back to the high court.
The Office of the Comptroller of the Currency and the U.S. solicitor general's office said in a brief last month that the Second Circuit was wrong when it revived a consumer class action alleging Midland Funding was charging interest rates that violated New York’s usury cap even though the firm bought the debt from a national bank in May 2015. All other circuits hold that once a national bank issues a loan, that debt is not subject to state usury caps.
And that argument could hold sway in other circuits, potentially putting in place a circuit split that could lead the question of preemption back to the high court, said Walter Zalenski, a partner with Buckley Sandler LLP.
“I believe that the cert. petition process yielded some real value to banks and their assignees in the secondary market generally because it elicited a withering critique of the Second Circuit’s decision by the solicitor general and the OCC,” he said.