Rodge Cohen Quoted in Wall Street Journal Article on Supreme Court Review of Loan Rate LimitsMarch 21, 2016
On March 21, Mr. Cohen was quoted in a Wall Street Journal article, titled “Supreme Court Seeks Administration Views on States' Interest-Rate Caps,” about the Supreme Court's decision whether to hear a case challenging loan rate limits. The May 2015 U.S. Court of Appeals for the Second Circuit ruling in question prevented defaulted-loan buyer Midland Funding LLC from collecting charged-off credit card debt that it had purchased from Bank of America Corp. because Midland, unlike loan originator Bank of America, was not a national bank and therefore not allowed to charge interest rates above the limits prescribed by local state usury laws. The implication is that many loans could be devalued because their buyers will not be allowed to charge the same interest rates as their originators, dealing a major blow to the loan and securities markets. According to Mr. Cohen, the case “puts into question the validity of a loan every time it is sold or put into a securitization, if it is the type of loan that has an interest rate that could violate the usury law of the state with the lowest interest rate.” S&C wrote a Supreme Court amicus brief arguing that the Court overturn the appeals court ruling.