Still Not Valid When Made

Last year, we posted about Madden v. Midland Funding, LLC, 786 F.3d 246 (2d Cir. 2015), where the Second Circuit Court of Appeals decided to ignore the "Valid When Made" doctrine.  This is the established common law doctrine that if a loan is non-usurious when made, it remains non-usurious when assigned to another creditor, even when the new creditor would not qualify for the lending authority exercised by the loan originator.  In its decision, the Second Circuit departed from precedent in the Fifth, Seventh, and Eighth Circuit Courts of Appeal.  Financial institutions buying and selling debt on the secondary market hoped that the United States Supreme Court would step in, reverse the Second Circuit, and endorse the "Valid When Made" doctrine.