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Court Departs from Long-Held Federal Preemption for Nonbanks, Prompting Concern in Securitization Industry
Securitization industry participants are concerned about a recent ruling in a federal appeals court that overturned longstanding preemption certain nonbanks have enjoyed from state laws, including standards for debt collection. The ruling in late May by the Second Circuit Court of Appeals in the case of Madden v. Midland Funding could pose “significant implications for the securitization industry,” according to the Structured Finance Industry Group. The case involves...