Justia Banking Opinion Summaries

The New Hampshire Banking Department (Department) initiated an adjudicative proceeding against CashCall, Inc. (CashCall), WS Funding, LLC (WS Funding), and John Paul Reddam, for violations of RSA chapter 399-A (2006 & Supp. 2012) (repealed and reenacted 2015). Reddam is the president and chief executive officer of CashCall, a lending and loan services corporation headquartered and incorporated in California. Reddam owned all of CashCall’s corporate stock. Reddam was also the president of WS Funding, a wholly owned subsidiary of CashCall. WS Funding was a Delaware limited liability company with a principal place of business in California. CashCall appeared to be engaged in the business of purchasing and servicing small loans or “payday loans” in association with Western Sky Financial. Neither Reddam, CashCall, nor WS Funding was licensed under RSA chapter 399-A to issue small loans in New Hampshire. In June 2013, after analyzing and reviewing CashCall’s responses to an administrative subpoena duces tecum and reviewing the business relationships among CashCall, WS Funding, and Western Sky Financial, the Department issued a cease and desist order to CashCall, WS Funding, and Reddam. In the cease and desist order, the Department found that either CashCall, or WS Funding, was the “actual” or “de facto” lender for the payday and small loans, and that Western Sky Financial was a front for the respondents’ unlicensed activities. Reddam challenged the Department’s denial of his motion to dismiss for lack of personal jurisdiction. The New Hampshire Supreme Court determined the Department made a prima facie showings that: (1) Reddam’s contacts related to the Department’s cause of action; (2) he purposefully availed himself of the protection of New Hampshire law; and (3) it was fair and reasonable to require him to defend suit in New Hampshire. The Court therefore found no due process violation in the Department’s exercise of specific personal jurisdiction over Reddam. View "Petition of John Paul Reddam" on Justia Law

Plaintiff Mark Case appealed a superior court order that granted summary judgment to defendant St. Mary's Bank and denied his cross-motion for summary judgment on his claims that the bank engaged in trespass and violated state law and the New Hampshire Consumer Protection Act (CPA). The matter arose from the bank's foreclosure on property Plaintiff leased from his landlord, Jean Marcelin. Months before the foreclosure sale, pipes burst in an apartment above plaintiff's, causing a flood. The City of Manchester turned off water and electricity to the building. Plaintiff spoke about the problem to Marcelin, who denied that he still owned the property. Plaintiff then spoke about the problem to a Bank representative; the representative asked plaintiff to allow her, a plumber, and an electrician into the building. The plaintiff complied with this request. The City placed a legal notice on the property’s front door, stating that it was unsafe and prohibiting occupancy. Plaintiff had not resided at the property since the flood, though most of his possessions remained at the property. When the Bank allowed him access to the apartment to remove his possessions, plaintiff observed that his apartment door was "wide open" and subsequently alleged that many of his possessions were missing. Finding no error with the superior court order, the Supreme Court affirmed the decision. View "Case v. St. Mary's Bank " on Justia Law

Respondents the Commissioner of the New Hampshire Banking Department and the New Hampshire Banking Department (collectively, the Department), appealed an order of the Superior Court that permanently enjoined the Department from pursuing an administrative proceeding against Petitioner Jeffrey Frost on the ground that the Department lacked subject matter jurisdiction. Petitioners Frost, Chretien/Tillinghast, LLC, and Frost Family, LLC, cross-appealed, arguing that the trial court erred by denying their request for attorney’s fees. Frost is a member and designated manager of Chretien/Tillinghast, LLC (Chretien), and a member of Frost Family, LLC (Frost Family). Chretien and Frost Family (collectively, the LLCs) are New Hampshire limited liability companies organized for the purpose of real estate acquisition, holding, and development. The underlying dispute arose as the result of two seller-financed real estate transactions, one conducted by Frost Family and the other by Chretien. After both instances of seller-financing, Petitioner submitted a loan originator license application to the Department. At the time the administrative proceedings were initiated, the Department notified Petitioner that he could request a hearing with the Department. Petitioner did not file such a request. Instead, all Petitioners initiated a declaratory judgment proceeding in superior court, which included a request for a temporary restraining order. The petitioners contended that Respondents lacked subject matter jurisdiction to proceed against Frost and violated the State Constitution's prohibition against retrospective laws by seeking to impose a $25,000 fine for each alleged violation. After a hearing, the trial court granted the preliminary injunction, concluding that "[w]hile the [Department] may have jurisdiction over Frost because he is now a loan originator, it [could] take no action against him based on the September 2008 or the March 2009 transactions." Further, the trial court concluded that since the Department "may not impose any penalties on Frost," it did not need to consider the issue of the retrospective nature of the sanctions. Upon review, the Supreme Court agreed that the Department lacked subject matter jurisdiction over the matter and affirmed the superior court's judgment. View "Frost v. New Hampshire Banking Dept. " on Justia Law

Petitioner Countrywide Home Loans, Inc. appealed an award by the Commissioner of the State Banking Department in favor of Respondent Rachel Nicholson based on claims under the Consumer Protection Act. The issue stemmed from Respondent contacting Countrywide in 2005 in order to purchase a house. She spoke with two Countrywide agents who promised that they would "investigate and present her with the best [financing] program." At the hearing before the Commissioner, Respondent testified the agents orally approved her for a 30-year fixed rate mortgage loan at 6% interest. Thereafter, Respondent spoke with agents on a weekly basis regarding the property purchase and loan. The agents did not raise any problems with the loan application until two days before the scheduled closing date. On that day, despite the fact that there were no changes in Respondent's employment status or credit since the application had been filed, the agents informed her that Countrywide would not be able to grant a fixed interest loan for the amount she needed. They informed her that to purchase the home, she would need to apply for two different loans. On the scheduled closing date, as instructed by the agents, Respondent applied for two new loans at higher rates of interest but for shorter durations. After multiple hearings, the Commissioner ultimately entered an order ruling that Countrywide had committed "an unfair or deceptive practice" under state law, and ordered that Countrywide reimburse Respondent for all monies paid prior to, at and after closing, as well as discharge the first mortgage and void the second. Furthermore, Countrywide was ordered to quitclaim the property to Respondent. Finding that the Commissioner should not have granted a hearing on the merits of Respondent's claims, the Supreme Court vacated the award entered in her favor.