We just spoke at the Alaska Bar Association — Bankruptcy Section on the issue of the Alaska usury statute. We had less than two hour notice to prepare for the presentation. The materials are available at the Bar Office.
The attendees seemed surprised to learn that the Cox v. Cooper decision actually doesn’t have very wide sweeping effect. There are seven state statutes that exempt whole classes of creditors and transactions from the decision. Two Federal acts also limit the decisions scope: The Banking Act of 1864 and the Depository Institutions and Deregulation and Monetary Control Act of 1980. These two acts exempt all federal banks and state banks that compete against federal banks from state regulation. Add to that the Marquette National Bank v. First of Omaha Service Corp. and Smiley v. Citibank decisions and all interest and fees for banks are exempt from state regulation.
The Cox v. Cooper decision only concerns local Alaska credit between private parties. The sky is not falling. Even though the creditors bar insists that it is. I wonder how much money the local and national banks will pay in fees for amicus briefs on a local issue with no bearing on their operations? Indeed, regulating hard money lenders could actually send more business to the banks.
Thank you for the invite, Michelle Boutin, Chair of the Alaska Bar Association — Bankruptcy Law Section.