Civil Litigation,
Banking
Feb. 24, 2020
‘True lender’ attacks on preemption of state usury laws
In recent years, state regulators and private plaintiffs have attempted to circumvent and undermine a regime of legal certainty by arguing that preemption of state usury laws should apply only if — after applying a fact-intensive, multi-factor test — the bank is determined to be the “true lender” on the loan.
Ashley M. Simonsen
Partner
Covington & Burling LLP
1999 Avenue of the Stars
Los Angeles , CA 90067
Phone: (424) 332-4782
Email: asimonsen@cov.com
Stanford Univ Law School; Stanford CA
Ashley is a litigator whose practice focuses on defending complex class actions and antitrust litigation in state and federal court.
Under longstanding federal law that serves as a primary underpinning of today's credit markets nationwide, federal and state-chartered FDIC-insured banks have the power to make loans at the rate of interest allowed by the laws of their home states. Claims asserted against banks under the usury laws of other states are preempted. See 12 U.S.C. Sections 85, 1831d(a). These clear, predictable, uniform rules provide the structure and framework ...
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