Justia Banking Opinion Summaries

Goodwill filed suit against PNC seeking a declaratory judgment that it does not owe a prepayment charge in excess of $300,000 under the terms of its agreement with PNC. The court affirmed the district court's conclusion that Goodwill owed PNC a prepayment fee. Because Goodwill gave notice of its intent to make prepayment during the ten-year period of the loan during which interest on the outstanding principal was accruing at the Initial Rate of 4.79 percent per year, Goodwill owed a prepayment charge.View "Land of Lincoln Goodwill Indus. v. PNC Bank, NA" on Justia Law

Plaintiffs filed suit alleging, among other things, fraud and unfair business practices in the origination of plaintiffs' residential mortgage loans, and negligence in the subsequent servicing of the loans. On appeal, plaintiffs argued that the trial court erred in concluding that the complaint failed to allege fraud for which defendants are responsible and in concluding that defendants owed no duty of care to plaintiffs in the review of their applications for a loan modification. The court concluded that plaintiffs have alleged a cause of action for fraud against defendants where the complaint alleged that the loan documents concealed the terms of plaintiffs' loans and plaintiffs have alleged facts establishing defendants' liability for the alleged fraud. Accordingly, the court reversed as to plaintiffs' first, second, and sixth causes of action and remanded for further proceedings.View "Alvarez v. BAC Home Loans Servicing, L.P." on Justia Law

Plaintiff appealed the dismissal of his wrongful foreclosure suit involving a promissory note and an associated Deed of Trust on property in Fort Worth, Texas. The district court granted U.S. Bank's motion to dismiss after determining that all of plaintiff's claims relating to U.S. Bank's standing to foreclose failed as a matter of law, and plaintiff failed to allege any actionable misrepresentation on the part of U.S. Bank. The court concluded that the district court properly granted U.S. Bank's motion to dismiss because plaintiff failed to assert a claim for common-law fraud under Texas law and section 12.002 of the Texas Civil Practice & Remedies Code.View "Reece v. U.S. Bank Nat'l Assoc., et al." on Justia Law

Plaintiffs filed a class action suit against defendants, alleging that they violated Section 8 of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2607, by creating a joint venture (Prosperity) to skirt RESPA's prohibition on kickbacks while failing to disclose this business arrangement to its customers. The court concluded that the district court did not abuse its discretion denying plaintiffs' claims because plaintiffs' failed to move for judgment as a matter of law before the jury reached its verdict and because of the highly deferential lenses through which the court must review the issues before it. Accordingly, the court affirmed the judgment of the district court.View "Minter v. Wells Fargo Bank, N.A." on Justia Law

Plaintiffs, who guaranteed loans for their husbands' company, appealed the district court's grant of summary judgment in favor of Community on their claim under the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691 et seq. The court concluded that the text of the ECOA clearly provides that a person does not qualify as an applicant under the statute solely by virtue of executing a guaranty to secure the debt of another. Therefore, a guarantor does request credit and therefore cannot qualify as an applicant under the unambiguous text of the ECOA. Consequently, the court concluded that a guarantor is not protected from marital-status discrimination by the ECOA. The district court did not err in granting summary judgment to Community on plaintiffs' ECOA claim or their ECOA-based affirmative defense. Plaintiffs' argument that the district court erred in striking their demand for a jury trial is moot.View "Hawkins, et al. v. Community Bank of Raymore" on Justia Law

This appeal involves a dispute between the Trustee, appointed to protect public customers and creditors in the liquidation of LBI, and purchasers of LBI's assets over the entitlement to two sets of LBI assets: (1) the Margin Assets and (2) the Clearance Box Assets (CBAs). The district court held that Barclays was entitled to both the Margin Assets and the CBAs, and was conditionally entitled to the Rule 15c-3 Assets. The Trustee appealed from the Margin Assets and CBA rulings. Barclays cross-appealed from the Rule 15c3-3 Assets ruling but the settlement had disposed of that issue and cross-appeal. The court concluded that the transfer of the Margin Assets to Barclays was contemplated in the Asset Purchase Agreement and confirmed in the Clarification Letter. The court agreed with the district court that extrinsic evidence showed an intent to transfer the CBAs to Barclays. Accordingly, the court affirmed the judgment of the district court.View "In Re: Lehman Brothers Holdings Inc." on Justia Law

The Hawaii AG filed suit in state court against six credit card providers, alleging that each violated state law by deceptively marketing and improperly enrolling cardholders in add-on credit card products. The card providers removed to federal court and the AG moved to remand. The district court denied the motion to remand. The court concluded that the state law claims were not preempted by the National Bank Act of 1864, 12 U.S.C. 85-86. The court joined the Fifth Circuit in holding that sections 85 and 86 did not completely preempt the claims, as there is a difference between alleging that certain customers are being charged too much, and alleging that they should have never been charged for the service in the first place. Therefore, the AG did not plead a completely preempted claim and the district court erred in finding federal question jurisdiction. The court agreed with its sister circuits in holding that the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. 1332(d), does not completely preempt state law. Because the complaints unambiguously disclaimed class status, these actions cannot be removed under CAFA. There is no basis for federal jurisdiction and the cases should have been remanded to state court. Accordingly, the court reversed and remanded.View "State of Hawaii v. HSBC Bank of Nevada" on Justia Law

Ghazi Abbar, manager of the Abbar family trusts, lost $383 million invested with a United Kingdom affiliate of Citigroup and seeks to arbitrate his grievances under the rules of FINRA against a New York affiliate. The district court permanently enjoined the arbitration because Abbar is not a "customer" of the New York affiliate. The court held that a "customer" under FINRA Rule 12200 is one who, while not a broker or dealer, either (1) purchases a good or service from a FINRA member, or (2) has an account with a FINRA member. While Abbar was certainly a "customer " of Citi UK, that relationship does not allow Abbar to compel arbitration against its corporate affiliates. Because Abbar was not a customer of Citi NY, a FINRA member, he cannot arbitrate his claims against Citi NY.View "Citigroup Global Markets Inc. v. Abbar" on Justia Law

S.D. Codified Laws 53-9-6 prohibits parties from contractually limiting the statute of limitations except in the case of a “surety contract.” In this case, First Dakota National Bank purchased a financial institution bond from BancInsure, Inc. to provide coverage for liability issues that could arise in the course of the bank’s operations. The bond outlined that claims must be brought within two years of the discovery of a loss. In 2004, First Dakota issued a loan, which was obtained through forgery. First Dakota sought coverage under the bond for the loan, but BancInsure denied coverage on the ground that First Dakota had not brought suit within two years since the loss was discovered. First Dakota sued BancInsure in federal court seeking coverage under the bond and damages for the bank’s refusal to pay the claim. The district court certified to the Supreme Court the question of whether the financial institution bond in this case was a surety contract. The Supreme Court answered the question in the negative, holding that the bond in this case was not a surety contract.View "First Dakota Nat’l Bank v. BancInsure, Inc." on Justia Law

In 2008, Musgrave, a CPA, became involved in a tire recycling venture with Goldberg. Musgrave obtained a loan, guaranteed by the Small Business Administration (SBA), through Mutual Federal Savings Bank. The venture ultimately lost the $1.7 million loan and Musgrave lost his $300,000 investment. In 2011, the two were indicted. Goldberg pled guilty to one count of misprision of felony, and the recommended a sentence of three years of probation, restitution, and a special assessment. Musgrave was convicted of: conspiracy to commit wire and bank fraud and to make false statements to a financial institution, 18 U.S.C. 1349; wire fraud, 18 U.S.C. 1343; bank fraud, 18 U.S.C. 1344. The district court sentenced him to one day of imprisonment with credit for the day of processing, a variance from his Guidelines range of 57 to 71 months and below the government’s recommendation of 30 months. The Sixth Circuit vacated, noting that economic and fraud-based crimes are more rational, cool, and calculated than sudden crimes of passion or opportunity and are prime candidates for general deterrence. The district court relied on impermissible considerations and failed to address adequately how what amounted to a non-custodial sentence afforded adequate general deterrence in this context. . View "United States v. Musgrave" on Justia Law