Client Alert
A recent decision of the Maryland Court of Special Appeals could impact marketplace and other lenders who arrange for federal or state banks to fund consumer loans in Maryland at rates in excess of the applicable Maryland usury caps. Along with the May 2015 decision of the U.S. Court of Appeals for the Second Circuit in Madden v. Midland Funding, the decision could call into question the ability of consumer lenders to rely upon bank funding arrangements to establish usury law exemptions in certain states.
The Maryland decision concerned sanctions imposed by the Maryland Commissioner of Financial Regulation on CashCall, Inc., a California-based payday lender.
