When a Charlottesville-area woman bought a used car that needed substantial repairs she could not afford, she soon found herself in financial and legal distress. After turning to the Legal Aid Justice Center and two University of Virginia School of Law students, she saved about $10,000 in court.
Anthony Ramicone ’21 and Nooreen Reza ’21, who were volunteering through the Law School’s Pro Bono Program, also may have helped set a precedent for how the court calculates loan repayment in the future.
Soon after buying the car through a dealer loan with a 34.9% interest rate, the client realized it required significant repairs to operate safely. Though she returned the car to the dealership, the business sued her for the remainder of the loan.
In court, she was found liable for the amount of the loan, explained Maddy Starbranch ’15, a staff attorney with the center’s Economic Justice Program. The “nearly unconscionable” interest rate became part of a judgment that required the client to pay the loan back over 10 years. But because the client had longer to pay the loan back, the team argued, she would be paying a higher amount of interest than she would have over the life of the original loan.
“There are several dozen lawsuits by the same company, almost certainly using the same interest rate,” Starbranch said after a cursory search of the docket. “I can’t imagine how often this comes up.”
Starbranch reached out to the Law School’s Pro Bono Program for help in appealing the ruling. Reza focused on researching new arguments against a legal, “though morally wrong,” interest rate, Starbranch said. Ramicone created spreadsheets to demonstrate the impact of different interest rates on the amount of the loan. LAJC submitted the work of both students to Albemarle General District Court.
“The initial argument made by Nooreen was awesome and very persuasive, but was not adopted by the judge,” Starbranch said. “Importantly though, Nooreen’s work got us to oral argument and without that there would not have been a case at all. After oral argument, I re-worked our argument and had Anthony make spreadsheets that the judge did end up referencing in his decision.”
The court allowed for the high interest rate for the life of the loan — about two years — but then for the final eight years the rate will drop to 6%.
Starbranch says that after this case, other area residents who default on loans won’t be stuck with high interest rates for longer than the original loan period.
“This decision will save our client nearly $10,000 and will save countless other litigants untold sums of money in the coming years,” Starbranch said. “Although those future litigants won’t know it, the Pro Bono Program made a huge difference in their lives.”
The program, which encourages law students to volunteer 75 hours during the course of law school, seeks to cultivate in students a lifelong commitment to the provision of legal services to communities in need. At the same time, it offers students the chance to use their developing legal skills while helping to expand access to justice.
Ramicone, who worked as a director’s financial analyst for three years at the Consumer Financial Protection Bureau, reached out to the court to identify how interest is calculated on the judgments entered by the court. He then created spreadsheet exhibits demonstrating that the method of interest calculation the team was advocating would save their client thousands of dollars over time.
His past pro bono work included conducting legal and policy research on various education topics and generating resource guides for K-12 educators over the summer.
“I am thrilled that we were able to save the client a substantial sum of money,” Ramicone said, “and I am hopeful that the court will continue to use this method of calculation for future consumer loan cases.”
Reza said exorbitant interest rates and other unfavorable terms are increasingly common in sectors of the consumer lending industry targeting low-income borrowers.
She has worked on multiple pro bono projects with LAJC, largely focused on housing justice issues. She has also done pro bono work in immigration and refugee law with Forthright Legal and the International Refugee Assistance Project.
“I was very grateful to have the opportunity to work on this case,” Reza said. “The Pro Bono Program has been a central and meaningful part of my experience at UVA Law.”
Founded in 1819, the University of Virginia School of Law is the second-oldest continuously operating law school in the nation. Consistently ranked among the top law schools, Virginia is a world-renowned training ground for distinguished lawyers and public servants, instilling in them a commitment to leadership, integrity and community service.
