It is common knowledge that national bank’s are exempt from New York’s usury statute.  Or are they?

In a recent, detailed and well reasoned decision, in Citibank (South Dakota) v. Hansen, Judge Ciaffa of the Nassau County District Court surveyed the relevant federal statute (12 U.S.C. § 85), case law, agency opinions, and legislative history, and cast doubt on Citibank’s entitlement to collect interest of 29.9%, well above New York’s maximum rate of 16%.  The Court held that Citibank was entitled to exemption from New York’s usury limit and instead to rely on the less lenient usury laws of its “home state”, “only if at least one significant non-ministerial function associated with the account actually took place in the bank’s ‘home state’”,  as opposed to New York. (more…)

An under-reported decision issued earlier this spring, Midland Funding, LLC v. Mance, 21642/06 (Westchester Supreme), April may provide a basis for the dismissal of thousands of cases filed by one of the country’s larger debt buyers.  A Westchester County Supreme Court judge vacated a judgment obtained by Midland Funding against a consumer based on Midland’s failure to register with the New York Department of State. (more…)

On April 29, 2010, New York’s highest court issued its decision in Portfolio Recover Associates, LLC v. King.  The Court’s decision, which potentially impacts thousands of debt collection lawsuits involving old credit card debt, New York’s Court of Appeals held that a consumer was entitled to the shorter of New York’s statute of limitations (six years for breach of contract) and Delaware’s statute of limitations (three years for breach of contract). (more…)