Justia Banking Opinion Summaries

Plaintiff filed suit alleging that she was the victim of an identity theft scheme perpetrated by employees of Chase, and seeks to hold Chase liable for this identity theft under the New York Fair Credit Reporting Act, N.Y. Gen. Bus. L. 380-1, 380-s. At issue was whether plaintiff's suit is preempted by the federal Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681 et seq. The court held that 15 U.S.C. 1681t(b)(1)(F) preempts only those claims that concern a defendant’s responsibilities as a furnisher of information under the FCRA. The court concluded that, viewed in the light most favorable to plaintiff, the complaint advances claims against Chase for identity theft under N.Y. Gen. Bus. L. 380‐l and 380‐s based on acts of identity theft perpetrated by Chase employees, as distinct from any erroneous or otherwise wrongful actions by Chase in furnishing information to consumer reporting agencies. These identity theft claims are not preempted because they do not concern Chase’s responsibilities as a furnisher. The court further concluded that, to the extent that plaintiff’s complaint seeks relief based on Chase’s erroneous or otherwise improper furnishing of information to consumer reporting agencies, those claims are preempted. Accordingly, the court vacated and remanded. View "Galper v. JP Morgan Chase Bank, N.A." on Justia Law

Plaintiff filed suit on behalf of himself and a class of similarly situated individuals, alleging that Capital One violated certain provisions of the Federal Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692–1692p, by attempting to collect on defaulted or delinquent credit card accounts that Capital One had acquired from HSBC. The district court dismissed plaintiff's amended complaint. The court concluded that it need look no further than the statutory text to conclude that, under the plain language of the FDCPA, a bank (or any person or entity) does not qualify as a “debt collector” where the bank does not regularly collect or attempt to collect on debts “owed or due another” and where “the collection of any debts” is not “the principal purpose” of the bank’s business, even where the consumer’s debt was in default at the time the bank acquired it. In this case, the amended complaint’s factual matter establishes that Capital One’s collection efforts in this case related only to debts owed to it and that debt collection is only some part of, and not the principal purpose of, Capital One’s business. Therefore, Capital One's activity, as alleged by plaintiff, is not the activity of a “debt collector” under the FDCPA, and plaintiff cannot state a claim under the Act. Accordingly, the court affirmed the judgment. View "Davidson v. Capital One Bank (USA), N.A." on Justia Law

Latoya Brown purchased a Mazda 6 from Dick Smith Nissan, Inc. through the dealer's salesman, Robert Hiller. The purchase was contingent on acquiring third-party financing. Due to continuing and unresolved issues with financing, Brown returned the vehicle to Dick Smith. The car was later repossessed and sold by Sovereign Bank with a deficiency against Brown. Brown filed a complaint against Dick Smith and Old Republic Surety Company, the surety on Dick Smith's licensing bond, alleging violations of the South Carolina Dealers Act. The trial judge, in a bench trial, found in favor of Brown and awarded damages plus interest as well as attorney's fees and costs. Dick Smith and Old Republic appealed and the Court of Appeals reversed, concluding that any misconceptions that Brown had about her financing were caused by Sovereign Bank, not Dick Smith. Despite evidence in the record to support the trial judge's findings of fact, the Court of Appeals ignored those findings and substituted its own. By doing so, the Court of Appeals exceeded its standard of review. Accordingly, the Supreme Court reversed the Court of Appeals and reinstated the trial judge's decision. View "Brown v. Dick Smith Nissan" on Justia Law

Bank of America loaned Leipzig $960,000, secured by a deed of trust on a Brentwood, Tennessee residence. Leipzig assigned his rights in the residence to a trust, which leased it to Johannessen in 2010. The lease had a five-year term and an option to buy. Johannessen exercised that option in 2011, but otherwise did not act to obtain title. Leipzig stopped making payments. In 2013, Johannessen assigned his lease and option rights to Anarion; the residence was in foreclosure. Published foreclosure notices stated that Brock was a “substitute trustee” for purposes of the loan “by an instrument duly recorded.” Anarion alleges there was no such “instrument,” and, based on that putative “misrepresentation,” sued under the Fair Debt Collection Practices Act, 15 U.S.C. 1692. The court dismissed, holding that Anarion is not a “person” under the Act, which states that “any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable.” The Sixth Circuit reversed, reasoning that section 1692a(3), defines “consumer” to mean “any natural person,” suggesting that, when Congress meant to refer only to natural persons, it did so expressly. The court noted that its decision does not mean that Anarion can bring suit under the FDCPA. View "Anarion Invs., LLC v. Carrington Mortg. Servs., LLC" on Justia Law

Respondents, three married couples, obtained home equity lines of credit from Petitioners, a bank and its loan officer. Approximately four years later, Petitioners filed a putative class action alleging that these transactions were part of an elaborate “buy-first-sell-later” mortgage fraud arrangement carried out by Petitioners and other defendants. Petitioners alleged numerous causes of action, including fraud, conspiracy, and violations of Maryland consumer protection statutes. The circuit court granted summary judgment for Petitioners, concluding that the statute of limitations barred several of Respondents’ claims and that no Petitioner violated the Maryland Secondary Mortgage Loan Law as a matter of law. The Court of Special Appeals reversed. The Court of Appeals reversed, holding that the Court of Special Appeals (1) erred in concluding that Respondents stated a claim upon which relief could be granted under the Maryland Secondary Mortgage Loan Law; and (2) erred in concluding that it was a question of fact to be decided by the jury as to whether Respondents’ claims against Petitioners were barred by the relevant statute of limitations. View "Windesheim v. Larocca" on Justia Law

In 2004, CashCall, a licensed lender, issued Montgomery a consumer credit account. In 2011, CashCall sold that debt to GCFS for collection. In 2012, GCFS sold the debt to Mountain Lion. Neither GCFS nor Mountain Lion is a licensed finance lender under the Finance Lenders Law. These entities are also not institutional investors within the meaning of section 22340. Mountain Lion subsequently sued Montgomery for payment on the debt. Montgomery filed a cross-complaint challenging the validity of her debt under Financial Code section 22340(a), which provides that “A licensee may sell promissory notes evidencing the obligation to repay loans made by the licensee pursuant to this division or evidencing the obligation to repay loans purchased from and made by another licensee pursuant to this division to institutional investors, and may make agreements with institutional investors for the collection of payments or the performance of services with respect to those notes.” The court of appeal affirmed dismissal of her cross-complaint. The legislative history indicates no intent to prohibit the sale of debt to noninstitutional investors. View "Montgomery v. GCFS, Inc." on Justia Law

Plaintiff filed a putative class action alleging that defendants violated the Fair Debt Practices Act (FDCPA), 15 U.S.C. 1692e, 1692f, by charging and attempting to collect interest at a rate higher than permitted under the law of her home state and that defendants violated New York's usury law, N.Y. Gen. Bus. Law 349; N.Y. Gen. Oblig. Law 5-501; N.Y. Penal Law 190.40. The district court entered judgment in favor of defendants. The court reversed the district court's holding that the National Bank Act (NBA), 12 U.S.C. 85, preempts plaintiff's claims because neither defendant is a national bank nor a subsidiary or agent of a national bank, or is otherwise acting on behalf of a national bank, and because application of the state law on which plaintiff's claim relies would not significantly interfere with any national bank’s ability to exercise its powers under the NBA. Accordingly, the court vacated the judgment and remanded to the court to address in the first instance whether the Delaware choice-of-law precludes plaintiff's claims. Finally, the court also vacated the district court's denial of class certification. View "Madden v. Midland Funding, LLC" on Justia Law

After refinancing a home mortgage in 2007, Beukes, mailed a notice of rescission in 2010, which was rejected. Beukes stopped making payments. Mortgage Electronic Registration Systems (MERS), as nominee for the lender, published notices of a mortgage foreclosure sale. MERS ultimately purchased the property at a foreclosure sale. Beukes sued, seeking rescission and damages under the Truth in Lending Act, 15 U.S.C. 1635(a), claiming that the amount disclosed as the finance charge on the loan understated the amount they were actually charged by $944.31. The district court dismissed. The Eighth Circuit held an appeal pending the Supreme Court’s decision in Jesinoski v. Countrywide Home Loans, (2015), then affirmed the dismissal. Because Beukes mailed notice within three years, the right of rescission had not expired, but the finance charge disclosed in 2007 did not vary from the actual finance charge by more than one-half of one percent of the total amount financed, so it must be treated as accurate. Therefore, the right to rescind expired three business days after delivery of the disclosures. Beukes did not timely attempt to exercise any expanded right to rescind arising from section 1635(i)(2) that might have been available after the initiation of foreclosure proceedings. View "Beukes v. GMAC Mortg., LLC" on Justia Law

In 2014, the Eighth Circuit held that the Petersons’ claim for rescission under the Truth in Lending Act, 15 U.S.C. 1601, was time-barred by 15 U.S.C. 1635(f) because of their failure to file a lawsuit within three years of their transaction with Bank of America. In 2015, the Supreme Court held that another court had erred in holding that a borrower’s failure to file a suit for rescission within three years of the transaction’s consummation extinguishes the right to rescind and bars relief. Following remand by the Court, the Eighth Circuit vacated it earlier judgment and remanded. View "Bank of America v. Peterson" on Justia Law

Kaymark defaulted on a mortgage held by Bank of America (BOA). On behalf of BOA, Udren Law Offices initiated foreclosure proceedings. The body of the Foreclosure Complaint listed not-yet-incurred fees as due and owing, which, Kaymark alleged, violated state and federal fair debt collection laws and breached the mortgage contract. The Third Circuit reversed dismissal of claims that the disputed fees constituted actionable misrepresentation under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692, but affirmed dismissal of all other claims. By attempting to collect fees for legal services not yet performed in the mortgage foreclosure, Udren violated FDCPA section 1692e(2)(A), (5), and (10), which imposes strict liability on debt collectors who “use any false, deceptive, or misleading representation or means in connection with the collection of any debt,” and section 1692f(1) by attempting to collect “an[] amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.” The court analogized to similar claims in a debt collection demand letter. View "Kaymark v. Bank of America NA" on Justia Law