Justia Banking Opinion Summaries

Enacted in 2005, in response to the "debt treadmill," NRS Chapter 604A regulates the payday loan industry, including deferred deposit loans and loans with an annual interest rate greater than 40 percent. If a borrower cannot repay such a loan within 35 days, NRS 604A.480 subsection 1 allows for an extension but a licensee cannot extend the period beyond 60 days and cannot "add any unpaid interest or other charges accrued ... to the principal amount of the new deferred deposit loan or high-interest loan." However, under subsection 2, certain new deferred deposit or high-interest loans are exempt from those restrictions: A licensee may offer a new loan to satisfy an outstanding loan for a period of not less than 150 days and at an interest rate of less than 200 percent. The licensee must follow all of subsection 2's requirements for the new loan to be exempted. Subsection (2)(f) permits a loan under subsection 2 if the licensee does “not commence any civil action or process of alternative dispute resolution on a defaulted loan or any extension or repayment plan thereof." Reversing the district court, the Nevada Supreme Court held that NRS 604A.480(2)(f) bars a licensee from bringing any type of enforcement action on a refinancing loan made under NRS 604A.480(2) and is not merely a condition precedent to making a refinancing loan under the subsection. View "State of Nevada Department of Business and Industry, Financial Institutions Division v. Dollar Loan Center., LLC" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment on remand in favor of defendants in an action filed by mortgage loan borrowers alleging violation of the Truth in Lending Act (TILA). Specifically, borrowers alleged that the lender did not provide the required number of copies of the required notice and material disclosures, and thus borrowers could rescind their loan on a date just shy of the three-year anniversary of loan execution. The court held that the district court did not err in determining that the signed acknowledgement borrowers had executed created a rebuttable presumption that they received the required number of copies and that borrowers' evidence was insufficient to overcome that rebuttable presumption. View "Jesinoski v. Countrywide Home Loans, Inc." on Justia Law

More than 10 years ago, Tatis incurred a debt of $1,289.86 to Bally Fitness. Allied, a debt collector, sent Tatis a letter dated May 18, 2015 stating: “[The creditor] is willing to accept payment in the amount of $128.99 in settlement of this debt. You can take advantage of this settlement offer if we receive payment of this amount or if you make another mutually acceptable payment arrangement within 40 days.” The six-year New Jersey limitations period for debt-collection actions had already run. Tatis filed a class action, alleging that Allied’s letter violated the Fair Debt Collection Practices Act (15 U.S.C. 1692) because Tatis interpreted the word “settlement” to mean that she had a “legal obligation” to pay and the letter “[f]alsely represent[ed] the legal status of the debt" made “false threats to take action that cannot legally be taken,” and used “false representations and/or deceptive means to collect or attempt to collect." The Third Circuit reversed the dismissal of the suit. Collection letters may violate the FDCPA by misleading or deceiving debtors into believing they have a legal obligation to repay time-barred debts even when the letters do not threaten legal action. The least-sophisticated debtor could plausibly be misled by the specific language used in Allied’s letter. View "Tatis v. Allied Interstate LLC" on Justia Law

Anaya Law Group, a debt collector, filed suit in state court to collect an unpaid credit card debt, but the complaint overstated both debtor's principal due and the applicable interest rate. Debtor then filed suit against Anaya in federal court for violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq., and of California's Rosenthal Fair Debt Collection Practices Act. The district court granted summary judgment to Anaya. The Ninth Circuit held, however, that the false statements made by Anaya were material because they could have disadvantaged a hypothetical debtor in deciding how to respond to the complaint. Accordingly, the panel vacated summary judgment as to the FDCPA claim and remanded. In regard to the Rosenthal Act claim, the panel affirmed summary judgment on an alternative ground. The panel held that Anaya corrected the misstatements within fifteen days of discovering the violation and thus satisfied the requirements necessary to avail itself of a defense under the Rosenthal Act. View "Afewerki v. Anaya Law Group" on Justia Law

In 2005, Nicholas and Mary Conroy refinanced their home with a mortgage loan secured by a deed of trust on the property. Five years later, the Conroys stopped making payments and defaulted on their loan. In an effort to avoid foreclosure, the Conroys filed suit against defendants Wells Fargo Bank, N.A., successor by merger to Wells Fargo Home Mortgage, Inc.; Fidelity National Title Insurance Company aka Default Resolution Network, LLC; and HSBC Bank USA, N.A. as trustee for Merrill Lynch Mortgage Backed Securities Trust, Series 2007-2 (Wells Fargo). The trial court sustained Wells Fargo’s demurrer without leave to amend and entered a judgment of dismissal. On appeal, the Conroys contended the trial court erroneously dismissed their claims. After review, the Court of Appeal found the Conroys’ operative complaint did not state valid causes of action for intentional or negligent misrepresentation because they did not properly plead actual reliance or damages proximately caused by Wells Fargo. The trial court properly determined the Conroys could not assert a tort claim for negligence arising out of a contract with Well Fargo. For lack of detrimental reliance on any of Wells Fargo’s alleged promises, the Conroys did not set forth a viable cause of action for promissory estoppel even under a liberal construction of the operative complaint. Because Wells Fargo considered and rejected a loan modification for the Conroys before that date, section 2923.6 does not apply to them. The plain language of section 2923.7 requires a borrower to expressly request a single point of contact with the loan servicer. The Conroys’ operative complaint did not allege they ever requested a single point of contact, and the Conroys did not state they could amend their cause of action to allege they actually requested one. The trial court properly dismissed the Conroys’ Unfair Competition Law claim because it was merely derivative of other causes of action that were properly dismissed. View "Conroy v. Wells Fargo Bank" on Justia Law

McNeil opened a business checking account with Defendant. A “Master Services Agreement,” stated: [W]e have available certain products designed to discover or prevent unauthorized transactions, …. You agree that if your account is eligible for those products and you choose not to avail yourself of them, then we will have no liability for any transaction that occurs on your account that those products were designed to discover or prevent. McNeil was not given a signed copy of the Agreement, nor was he advised of its details. McNeil ordered hologram checks from a third party to avoid fraudulent activity. McNeil later noticed unauthorized checks totaling $3,973.96. The checks did not contain the hologram and their numbers were duplicative of checks that Defendant had properly paid. Defendant refused to reimburse McNeil, stating that “reasonable care was not used in declining to use our ... services, which substantially contributed to the making of the forged item(s).” Government agencies indicated that they would not intervene in a private dispute involving the interpretation of a contract. Plaintiff filed a putative class action, citing Uniform Commercial Code 4-401 and 4-103(a), The district court dismissed, holding that the Agreement did not violate the UCC and shifted liability to Plaintiff. The Sixth Circuit reversed. Plaintiff stated a plausible claim that the provision unreasonably disclaims all liability under these circumstances; the UCC forbids a bank from disclaiming all of its liability to exercise ordinary care and good faith. View "Majestic Building Maintenance, Inc. v. Huntington Bancshares, Inc." on Justia Law

Plaintiffs filed suit against several financial entities for foreclosing on a mortgage loan. The district court granted summary judgment for defendants. At issue were plaintiffs' claims under the Missouri Merchandising Practices Act (MMPA), Mo. Rev. Stat. 407.020. The court affirmed and held that the foreclosure was justified because defendants had a right to foreclose on the house and thus the MMPA claim failed as a matter of law because the loss was not caused by any misconduct on behalf of defendants. Likewise, plaintiffs' tortious interference claim failed because the foreclosure was legal. View "Wheatley v. JP Morgan Chase Bank" on Justia Law

This case arose from an allegedly forged home-equity loan. Plaintiff sued the lenders, bringing several claims, including statutory fraud and violations of the Texas Finance Code and Texas Deceptive Trade Practices Act. The trial court granted summary judgment for the lenders without stating its reasons. The court of appeals affirmed. The Supreme Court affirmed in part and reversed and remanded in part, holding that the court of appeals (1) properly affirmed summary judgment on Plaintiff’s constitutional forfeiture claim; and (2) erred in holding that Plaintiff’s remaining claims were barred on statute of limitations and waiver grounds. View "Kyle v. Strasburger" on Justia Law

Sue Walters filed a lawsuit against Quicken Loans, Inc., alleging that Quicken Loans violated the “illegal loan” provision of the West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code 31-17-8(m)(8), in originating a primary mortgage loan for her. A jury found in favor of Walters and awarded her damages in the amount of $27,000. Walters sued additional defendants - an appraiser and the entity that serviced the loan - with whom she settled. In total, the court offset $59,500 of the $98,000 paid by the settling defendants against the total damages, costs and fees awarded against Quicken Loans. The Supreme Court affirmed in part, reversed in part and remanded, holding that the circuit court (1) did not err in allowing the illegal loan claim to go to the jury, as section 31-17-8(m)(8) applies to a single primary mortgage loan; (2) did not err in ruling that Walters was a prevailing party and thus entitled to an award of fees and costs; (3) erred in offsetting only a portion of the settlement monies received from the settling defendants against the total compensatory damages received by Walters. View "Quicken Loans, Inc. v. Walters" on Justia Law

Plaintiff filed suit alleging that GCF violated the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., by failing to clearly and conspicuously disclose the annual percentage rate (APR) and finance charge in his Retail Installment and Security Contract. The Eighth Circuit affirmed the district court's denial of plaintiff's motion for judgment as a matter of law where the Summary of Understanding was not completely integrated; the district court thus did not err in admitting parol evidence; and there was sufficient evidence to support GCF's affirmative defense of waiver. The court also affirmed the district court's denial of plaintiff's motion for a new trial where there was no record of what objections plaintiff would have raised had the district court turned on "white noise" during the initial portion of the trial, nor was he prejudiced; even if the district court erred by not sustaining plaintiff's objection to GCF's counsel's statement during closing argument, the statement was not such a magnitude that a new trial was warranted; the court rejected plaintiff's claims of error as to the discretionary evidentiary rulings; and there was no error in the district court's response to a jury question. View "Smiley v. Gary Crossley Ford, Inc." on Justia Law