In “Madden Creates More Uncertainty for Marketplace Lenders,” a Law360 article, Joseph Cioffi and Massimo Giugliano discuss the ongoing case of Madden v. Midland Funding and its impact on the marketplace lending. The authors explain the significance of the initial decision by the Second Circuit in 2015, which created substantial risk for marketplace lenders that rely on a partner bank origination model to avoid state usury caps, and analyze the potential impact of a subsequent decision striking down a choice of law clause often relied on by lenders to guard against usury claims….
Joseph Cioffi contributes to Blueshift Research’s report featuring an in-depth look into subprime auto loans from a diverse range of industry perspectives, including, new and used car dealerships, repossessors and finance companies. Regarding the inevitable comparison to subprime mortgage lending, Joseph notes, “Large financial institutions were making large bets in that market. It was a widespread phenomenon. The subprime auto loan market may become a very large problem for a more contained market. It doesn’t carry the systemic risk of the subprime bubble.” Click here to view the full article.
In a recent American Banker article, “Crisis in Student Loan Servicing is Building,” Joseph Cioffi discusses how actions against the largest student loan servicer, Navient, may expose improper practices in student loan servicing that are contributing to the student loan debt crisis. As Joseph notes, in a similar way, actions against subprime mortgage servicers exposed issues that contributed to the subprime mortgage fallout. Joseph notes the total impact of servicing issues is unknown, and it may in fact be too late for servicers to avoid litigation, but there is always room for improvements in servicing practices which,…
Joseph Cioffi contributes his insights to this American Banker article that provides perspectives from industry insiders regarding the trends affecting auto loan performance, including longer maturities on used auto loans. “Borrowers can get underwater very easily on a used car with a 7-year loan,” Joseph said. Click here to view the full article.
This Structured Credit Investor article highlights Joseph Cioffi’s impressions of the recent CFPB v. Navient case and how the spotlight on Navient may reveal systemic issues in student loan servicing, which could result in further litigation. As Joseph points out, “there is the issue down the line that we could see more lawsuits like the Navient one come to light and particularly servicers could see more lawsuits against them.” Click here to view the full article.