Justia Banking Opinion Summaries

Boggio and wife, Sarah, resided in Texas. Boggio served military tours, and assigned Sarah power of attorney. They separated; Boggio left the state. Six months later Sarah purchased a car with financing through USAA. Sarah allegedly signed Boggio’s name, unbeknownst to him, on the check issued to the car dealership. The car was later listed on Boggio’s car insurance. The divorce decree confirmed that the car was acquired during the marriage, identified the associated loan as a marital debt, and stated that Sarah alone would be responsible for payment. Later, Boggio, residing in Cincinnati, experienced credit problems due to missed payments. Boggio wrote to consumer reporting agencies and USAA disputing his status as co-obligor. USAA attempted to mail Boggio (but not his counsel) a copy of the allegedly forged check, but the letter was sent to an incorrect Texas address. Because Boggio would not go to Texas to file a police report, USAA declared the dispute a civil matter between the Boggios. In Boggio’s suit under the Fair Credit Reporting Act, the district court granted summary judgment to USAA. The Sixth Circuit reversed. A reasonable jury could find that USAA’s investigation and notices were unreasonable.View "Boggio v. USAA Fed.l Sav. Bank" on Justia Law

Plaintiffs had a Home Depot credit card issued by Citibank. In 2005, Krahenbuhl, who also had a Citibank-Home Depot credit card, contracted with plaintiffs to build a log cabin for speculative resale. A log cabin package was purchased over the phone from Home Depot for $9,761.64 and charged to Krahenbuhl’s account. The materials were approved by, delivered to, and signed for by plaintiffs, who eventually built and sold the log cabin. The relationship between Krahenbuhl and plaintiffs deteriorated, and Krahenbuhl disputed the charge. Citibank transferred the charge from Krahenbuhl’s credit card to plaintiffs’ card. Krahenbuhl and plaintiffs reached a settlement through mediation, which plaintiffs thought included payment of the credit card charge. About one year later, they claim, they became aware that the $9,761.64 charge had been transferred to their account. Neither Citibank nor Home Depot would remove the charge; accrued interest has resulted in a total sum of approximately $21,000. Plaintiffs sued under the Wisconsin Consumer Act, Wis. Stat. 427.104(1)(j). Citibank was dismissed and the district court granted Home Depot summary judgment, finding that Home Depot had not acted either directly or indirectly in an attempt to collect a debt. The Seventh Circuit affirmed. View "Parent v. Home Depot U.S.A., Inc." on Justia Law

Plaintiff commenced this action, on behalf of herself and the 181 other individuals in New York State who had received student loan collection letters from defendant. At issue was whether a debt collector's inaccurate representation to a debtor that her student loans were "ineligible" for bankruptcy discharge was a "false, misleading, or deceptive" debt collection practice, in violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq. The court held that it was because the least sophisticated consumer would interpret defendant's letter as representing, incorrectly, that bankruptcy discharge of her loans was wholly unavailable to her. Accordingly, the court reversed and remanded. View "Easterling v. Collecto, Inc." on Justia Law

A Stonefire loan officer, contacted the Lees and convinced them that they could refinance and lower their mortgage payment, get rid of private mortgage insurance, and consolidate credit card debt. They signed papers that they did not read, agreeing to pay Stonefire a brokerage fee of $7000.00 and a processing fee of $995, and that the exact amount of “additional compensation,” would be disclosed at closing. The additional compensation was the “Yield Spread Premium,” to lower up-front closing costs. The lender paid a Premium of 3.5 percent, which increased the interest rate on the loan. The Lees received a variable rate a five percent higher than the fixed rate on their prior loan. At closing, they signed a HUD-1 settlement statement that described a “[p]remium pd to broker by lender to Stonefire” of $5670 paid outside closing. The district court granted summary judgment to the lender on conspiracy and civil fraud claims and to Stonefire on the claim of civil conspiracy. The Lees and Stonefire settled. With respect to the lender, the Sixth Circuit affirmed as to fraud, but reversed on the civil conspiracy claim; Ohio case law prohibits lenders from knowingly conspiring with brokers to conceal mortgage costs, from borrowers. View "Lee v. Countrywide Home Loans, Inc." on Justia Law

Pro se litigant Sharon McCrea appealed a district court's judgment that awarded over eight thousand dollars to CBM Collections, a Missoula collection agency. McCrea owned a business which had an outstanding credit card bill with the Missoula Federal Credit Union (MFCU). She was notified that the debts were being assigned to CBM for collection. CBM subsequently filed its complaint to seek the full amount owned plus interest. McCrea answered, arguing that MFCU was unfairly and deliberately targeting her for collection and that the matter should be "remanded" to the credit union so that she could continue making incremental payments. McCrea did not deny owing the debts. She sought discovery of credit card statements and cell phone billing statements to establish she had been in regular contact with MFCU in an attempt to resolve the matter. The district court granted CBM's motion for judgment on the pleadings without ruling on McCrea's discovery request and entered the award. Finding no error in the district court's ruling, the Supreme Court affirmed. View "CBI Inc. v. McCrea" on Justia Law

Plaintiffs, Lewis, Ross and Jennings, were limited guarantors of loans owed by River City, which filed for bankruptcy. Defendant acquired the original lender’s position and reported to credit reporting agencies that the plaintiffs were obligated in the full amount of the underlying loans rather than in limited amounts. In a suit under the Fair Credit Reporting Act 15 U.S.C.1681–1681x, defendant counterclaimed on the guaranty agreements. The district court found defendant liable to each plaintiff for FCRA violations and the plaintiffs in breach of their guaranty agreements. The court awarded Lewis $30,000 in actual damages and $120,000 in punitive damages and each remaining plaintiff $25,000 in actual damages and $100,000 in punitive damages. The court jointly awarded plaintiffs $20,024.55 in costs and $218,674.00 in attorney’s fees. On the breach of guaranty claims, the court found Lewises liable for $256,797.29, Jennings liable for $255,367.29, and Ross liable for $306,726.14. Defendant objected to Lewis’s garnishment, arguing that defendant was the net judgment creditor because the proper method of calculation required the court to: add the amounts defendant owed plaintiffs (including attorney’s fees and costs); add the amount paintiffs collectively owed defendant; then set off the former sum from the latter. The district court rejected the argument. The Sixth Circuit affirmed. View "Lewis v. United Joint Venture" on Justia Law

As the Ninth Circuit Court of Appeals said, "This case lends credence to the old adage that bad things comes in threes." Plaintiff was a cancer survivor who required experimental leukemia treatment. During his treatment, Plaintiff's identity was stolen by a hospital worker. When Plaintiff attempted to remedy the identity theft, the banks and credit rating agencies were allegedly uncooperative and continued to report the fraudulently opened accounts. In the case of Chase Bank (Chase), the thief's address was tagged as Plaintiff's. The district court granted summary judgment in favor of Chase on Plaintiff's false-reporting claims under the Fair Credit Reporting Act (FCRA). The Ninth Circuit Court of Appeals (1) reversed the judgment as to Chase's alleged violations of the FCRA, as issues of material fact remained on this issue; (2) reversed the district court's dismissal of similar claims against FIA Card Services on statute of limitations grounds; and (3) affirmed the denial of Plaintiff's motion to amend to reinstate his claims under California law. View "Drew v. Equifax Info. Servs., LLC" on Justia Law

A bank customer sued her bank to recover for unauthorized withdrawals from her checking account, made using her check card and personal identification number (PIN). Federal law requires a bank to investigate such disputed transactions, to notify the customer if it has verified the transactions as authorized, and to recredit the account if the withdrawals were unauthorized; failure to do so renders the bank liable to the customer for up to treble damages. The bank investigated the withdrawals at issue in this case, found that they were the product of a scheme to defraud the bank, and denied liability for the withdrawals. The customer, represented by counsel, brought suit. By the time the case was tried to the district court, the customer was pro se. After a two-day bench trial, the District Court rejected the customer's EFTA claims and entered judgment for the bank. Specifically, the District Court found that the transactions were authorized because they were part of a scheme to defraud the bank. The customer appealed pro se. Although the briefs were "inartfully" drawn, she challenged the District Court's finding as clearly erroneous. After thorough review, the Eleventh Circuit found no error and therefore affirmed. View "Merisier v. Bank of America, N.A." on Justia Law

In 2007, while Plaintiffs-Appellants Scott and Lisa Sanders were attempting to refinance their home, they discovered Salt Lake City Credit Union had “reported twelve new maxed-out accounts on the Sanders[es]’ credit [reports].” They say this “destroyed [their] credit and made it impossible to refinance.” Afterward, the credit union “apologized for the misreporting” and “offered to make amends by providing [them] with a ‘free’ refinance.” They accepted this conciliatory offer and closed on the refinancing loan in July 2007. Salt Lake City Credit Union later merged with appellee Mountain America. In March 2009, the Sanderses applied to Mountain America to again refinance their loan. They completed the application by phone, but Mountain America denied their application at the end of the call. Pertinent to this appeal, the Sanderses’ complaint alleged: (1) they had not been provided with the disclosures required under the Truth-in-Lending Act (TILA) thereby entitling them to invoke statutory rescission; (2) Mountain America violated the Equal Credit Opportunity Act (ECOA) when it failed to provide a notice of adverse action after denying their application for refinancing; and (3) Mountain America’s inaccurate credit reporting violated the Fair Credit Report Act (FCRA). The district court dismissed these claims on the pleadings. Although the Tenth Circuit had not addressed the issue, several circuits allow district courts to equitably condition the creditor’s duty on the borrower’s ability to repay the loan proceeds. In this case, however, the district court went further by concluding a borrower seeking to compel rescission must plead ability to repay. The court invoked this rule to dismiss the TILA rescission claim of the Sanderses. It also dismissed their claims under the Equal Credit Opportunity Act and Fair Credit Reporting Act. Upon review, the Tenth Circuit affirmed in part, reversed in part, and remanded for further proceedings: the Court affirmed with respect to the FCRA claim and reversed with respect to the TILA rescission and ECOA claims. View "Sanders v. Ethington" on Justia Law

Security Financial Fund, LLC, ("Security Financial") extended to Byron and Marilynn Thomason ("the Thomasons") a series of loans evidenced by five promissory notes, which were secured by three deeds of trust and two mortgages on real property. As a result of the Thomasons' non-payment on two prornissory notes secured by the mortgages, Security Financial foreclosed on those notes. While the foreclosure was still pending, the Thomasons filed a separate action against Security Financial and others, addressing all the promissory notes executed in favor of Security Financial by the Thomasons. That action sought recovery for breach of contract and fraud, among other theories. Both actions were consolidated. On appeal from the district court's decision to grant Security Financial's Motion for Summary Judgment with regard to the claims that the Thomasons asserted in their fraud case, the Thomasons contended, among other things, that the district court lacked subject matter and personal jurisdiction to foreclose on the secured property and abused its discretion. The Supreme Court concluded that all of the Thomasons' claims were waived or frivolous, and accordingly affirmed the Final Judgment in favor of Security Financial. View "Security Financial Fund v. Thomason" on Justia Law