Bill Introduced in Congress to Make “Valid When Made” the Law of the Land


Chief Deputy Whip Patrick McHenry (R, NC-10), the Vice Chairman of the House Financial Services Committee, introduced H.R. 5724, the Protecting Consumers’ Access to Credit Act of 2016, which would reaffirm the longstanding legal precedent under the National Bank Act and the Federal Deposit Insurance Act that federal law preempts a loan’s interest if valid when made. The legislation was introduced to address one of the issues raised by the Second Circuit in Madden vs. Midland Funding. Legislation.

Case Update: Midland Funding v. Madden – Supplemental Brief

As we reported in our case update on May 26, the Solicitor General filed its brief expressing the Government’s views on the cert-worthiness of Midland Funding v. Madden. Yesterday, Midland filed a supplemental brief with the Court responding to the Solicitor General’s views. Midland emphasizes the clarity and firmness of the Solicitor General’s assessment that the Second Circuit’s decision is incorrect. Midland further argues that despite the Solicitor General’s ultimate recommendation that the Court decline review, the Court should nevertheless take the case. The brief argues that the case “presents a question that is critical to the functioning of the national banking system and to the availability of consumer credit,” and that the issues need resolution now, not later.

The Supreme Court is now poised to decide whether to grant the petition. A docket entry issued yesterday indicates that the case has been distributed for the Court’s June 23 conference. At that conference, the Court will discuss whether to grant or deny cert. or postpone consideration of the petition until the next conference (set for September 26). Unless at the June 23 conference the Court decides to hold the petition for further consideration, we expect that an order list indicating whether the petition has been granted or denied will be issued the following Monday, June 27.