Justia Banking Opinion Summaries

Plaintiffs filed suit in state court alleging that Quicken Loans originated unlawful loans in West Virginia and that Defendant Appraisers, which included both the named appraisers and the unnamed class of appraisers, were complicit in the scheme. Quicken Loans removed to federal court under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d). The district court then granted plaintiffs' motion to remand to state court under the local controversy exception. Quicken Loans appealed. The court vacated and remanded for a determination by the district court as to whether the named defendant appraisers satisfied the "at least 1 defendant" requirement of the local controversy exception. View "Quicken Loans Inc. v. Alig" on Justia Law

Plaintiff was sued by Asset Acceptance, a debt collector, for a debt arising from her purchase of natural gas for household use. She sued, claiming that Asset Acceptance sued after the statute of limitations on the creditor’s claim had run, in violation of the Fair Debt Collection Practices Act, 15 U.S.C. 1692. Plaintiff moved to certify a class of debtors sued, after the limitations period, by Asset Acceptance for debts from sale of natural gas to consumers. The district judge waited 25 months and denied the motion. The class would have 793 members, of whom 343 reside in Illinois; 290 were sued four to five years after the claims accrued and 45 were sued more than five years after accrual. The judge shrank the class to 45, then to 23, ruling that suing to collect a debt but failing to serve the defendant did not violate the Act even if the suit was untimely, and concluded that 23 was too small a number to justify a class action. The Seventh Circuit reversed, finding that all 343 Illinois residents were proper class members because the applicable statute of limitations is four years. Certification need not be limited to Illinois residents or to claims under the federal Act. View "Phillips v. Asset Acceptance, LLC" on Justia Law

In 2006, Plaintiff financed a purchase of residential property. Residential Finance was the lender; Chase serviced the loan. In 2011 Plaintiff sent Chase a “Qualified Written Request” under the Real Estate Settlement Procedures Act, 12 U.S.C. 2605(e), requesting information about the amount owed on the loan, the identity of the “current holder,” the date Chase began servicing the loan, and a breakdown of accrued charges. Plaintiff disputed late fees and other charges and stated that Chase had refused a loan modification for which she qualified and had failed to provide a copy of the Note as requested. Chase sent some material, but stated that any requested information not included was either unavailable or considered proprietary; the letter did not provide the identity of the loan’s owner or information on the correctness of Plaintiff’s account, and did not provide contact information for obtaining assistance. Plaintiff sued, alleging that she made excess payments that Chase failed to credit, violations of the Truth in Lending Act, 15 U.S.C. 1641(f)(2), RESPA, the Ohio Consumer Sales Practices Act, and conversion. Chase finally identified the owner of the loan: Fannie Mae. The district court dismissed. The Sixth Circuit affirmed with respect to TILA, but reversed dismissal of the RESPA claim, finding that Plaintiff adequately alleged causation of damages. View "Marais v. Chase Home Fin., LLC" on Justia Law

Plaintiffs appealed from the district court's grant of defendants' motion for summary judgment on plaintiffs' Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., claims and denial of plaintiffs' motion for reconsideration of an earlier dismissal of their Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq., claims against The Money Store. The court held that the district court erred in concluding that The Money Store was not a "debt collector" under the false name exception to FDCPA liability. Where a creditor, in the process of collecting its own debts, hires a third party for the express purpose of representing to its debtors that the third party is collecting the creditor's debts, and the third party engages in no bona fide efforts to collect those debts, the false name exception exposes the creditor to FDCPA liability. In regards to the TILA claims, the court concluded that the district court correctly determined that, because plaintiffs' mortgage documents did not name The Money Store as the person to whom the debt was initially payable, The Money Store was not a "creditor" under TILA and was therefore not subject to liability. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Vincent v. The Money Store" on Justia Law

Med‐1 buys delinquent debts and purchased Suesz’s debt from Community Hospital. In 2012 it filed a collection suit in small claims court and received a judgment against Suesz for $1,280. Suesz lives one county over from Marion. Though he incurred the debt in Marion County, he did so in Lawrence Township, where Community is located, and not in Pike Township, the location of the small claims court. Suesz says that it is Med‐1’s practice to file claims in Pike Township regardless of the origins of the dispute and filed a purported class action under the Fair Debt Collection Practices Act venue provision requiring debt collectors to bring suit in the “judicial district” where the contract was signed or where the consumer resides, 15 U.S.C. 1692i(a)(2). The district court dismissed after finding Marion County Small Claims Courts were not judicial districts for the purposes of the FDCPA. The Seventh Circuit affirmed.View "Suesz v. Med-1 Solutions, LLC" on Justia Law

Serna defaulted on a loan he obtained through the Internet that was subsequently purchased by Samara. Attorney Onwuteaka, who owns Samara, obtained a default judgment and attempted to collect. Serna then filed suit in federal court, alleging that because he neither resided nor entered the loan agreement in Harris County where the judgment entered, the suit violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692, venue requirement. A magistrate found Serna’s suit was untimely under the FDCPA’s one-year limitations period because he filed his complaint more than one year after Onwuteaka filed his petition in the underlying debt-collection action. The Fifth Circuit reversed, that the alleged FDCPA violation arose only after Serna received notice of the underlying debt collection action. The FDCPA provides that a debtor may bring an action “within one year from the date on which the violation occurs.” A violation of does not occur until the debt-collection suit is filed and the alleged debtor is notified of the suit.View "Serna v. Law Office of Joseph Onwuteaka" on Justia Law

The Simons filed for Chapter 7 bankruptcy protection, identifying a nonpriority credit-card debt to FIA. FIA retained Weinstein, which sent the Simons a letter and notice through their bankruptcy counsel, stating that FIA was an adversary proceeding under 11 U.S.C. 523 to challenge dischargeability, but offering to forego the proceeding if the Simons stipulated that the debt was nondischargeable or agreed to a reduced amount. The letter stated that a Rule 2004 examination had been scheduled, but that Weinstein was open to settlement; it mentioned the possibility of rescheduling and set out information about challenging the debt. The subpoena certificate, signed by a Weinstein attorney, stated that a copy was mailed to the Simons’ home and their attorney’s office. The Simons allege that Weinstein did not actually send it to their home. Their counsel received copies. The Simons moved to quash, alleging violations of Bankruptcy Rule 9016 and Civil Rule 45 subpoena requirements, and filed an adversary proceeding asserting Fair Debt Collection Practices Act claims based on the letter. The Bankruptcy Court quashed the notices, but ruled that it lacked jurisdiction over the FDCPA claims. The Simons then sued FIA and Weinstein in the district court, which dismissed. The Third Circuit affirmed dismissal of 15 U.S.C 1692e(5) and (13) claims for allegedly failing to identify the recording method in the Rule 2004 examination and by issuing the subpoenas from a district other than where the examinations were to be held. The court also affirmed dismissal of a 1692e(11) claim because its mini-Miranda requirement conflicts with the Bankruptcy Code automatic stay. The court reversed dismissal of claims based failing to serve the subpoenas directly on the individuals and failing to include the text of Civil Rule 45(c)–(d) in the subpoenas. View "Simon v. FIA Card Servs., NA" on Justia Law

Todd alleges that in 2012 he received a recorded telephone message from Collecto asking him to call and help the company locate his mother, Terry. He called; a Collecto representative told him that Terry owed AT&T money for cell phone service. Todd stated that he is not Terry, but the representative continued to discuss the alleged debt without asking how to reach Terry or asking Todd to pay the bill. Todd claimed that this interaction harmed him emotionally and violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692b, which permits a debt collector to call a third party for help in locating a “consumer” but prohibits revealing the existence of the consumer’s debt to the third party. Section 1692f prohibits “unfair or unconscionable means to collect or attempt to collect any debt.” The district court concluded that Todd lacked standing under the Act. The Seventh Circuit affirmed, finding that Todd lacked standing under 1692b and failed to state a claim under 1692f. View "Todd v. Collecto, Inc." on Justia Law

Mortgagors appealed the district court's grant of judgment on the pleadings to their lenders in a dispute regarding a home loan. At issue on appeal was whether mailing a notice of rescission within three years of consummating a loan was sufficient to "exercise" the right to rescind a loan transaction under 15 U.S.C. 1635(a) or, alternatively, whether a party seeking to rescind the transaction was required to file a lawsuit within the three-year statutory period. The court held that a party seeking to rescind a loan transaction must file suit within three years of consummating the loan. Accordingly, the court affirmed the district court's judgment on the pleadings in favor of the lenders. View "Jesinoski, et al. v. Countrywide Home Loans, Inc., et al." on Justia Law

The defendants, affiliated companies, owned ATMs in Indianapolis bars that were popular with college students. Plaintiffs filed a purported class action, based on violation of the Electronic Funds Transfer Act, 15 U.S.C. 1693b(d)(3). At the time, the Act required a sticker notice on the ATM and an onscreen notification during transactions. Defendants provided onscreen notice but not, according to the complaint, a sticker. The Act has been amended to remove the sticker notice requirement. The district court decertified the class. The Seventh Circuit reversed, finding that the district judge did not provide adequate explanation. While the compensatory function of the class action has no significance in this case, the damages sought by the class, and, more importantly, the attorney’s fee that the court will award if the class prevails, will likely make the suit a wake‐up call and have a deterrent effect on future violations of the Electronic Funds Transfer Act. View "Hughes v. Kore of IN Enters., Inc." on Justia Law