Justia Banking Opinion Summaries

After plaintiff obtained a home equity loan from Countrywide, he filed a pro se complaint alleging five causes of action against Bank of America, the company that acquired Countrywide. The Eighth Circuit affirmed the district court's dismissal of two claims based on Bank of America's failure to honor plaintiff's alleged early payoff right. In this case, plaintiff's claims were barred by the doctrine of res judicata because he had been a member of a global class action settlement that included a broad release of claims by all class members. The court also held that the district court did not abuse its discretion by promptly setting the remaining claims for trial. The court explained that, at minimum, Bank of America failed to establish that the statute of frauds barred these claims as a matter of law on the record. Accordingly, the court affirmed in part, reversed in part, and remanded. View "Calon v. Bank of America Corp." on Justia Law

Plaintiff filed suit against Propel, alleging violations of the Truth in Lending Act (TILA), the Electronic Funds Transfer Act (EFTA), and the Virginia Consumer Protection Act (VCPA). Plaintiff's action stemmed from a tax payment agreement (TPA) he entered into with Propel under Virginia Code section 58.1-3018. Propel then moved to dismiss the TILA and EFTA claims.The Fourth Circuit affirmed the district court's denial of Propel's motion to dismiss, holding that plaintiff had standing to bring claims under EFTA because the harm that he alleged was a substantive statutory violation that subjected him to the very risks that EFTA, a consumer protection statute, was designed to protect against. The court also held that the TPA was subject to TILA and EFTA because the TPA was a consumer credit transaction. In this case, the TPA was a credit transaction because it provided for third-party financing of a tax obligation. Furthermore, the TPA was a consumer transaction because, as financing of a real property tax debt, it was a voluntary transaction that plaintiff entered into for personal or household purposes. View "Curtis v. Propel Property Tax Funding, LLC" on Justia Law

CMI, a purchaser and reseller of mortgage loans, filed suit against Platinum, an originator and seller of mortgage loans, alleging that Platinum breached a contract by failing to repurchase seven allegedly defective loans after CitiMortgage demanded repurchase by sending multiple notices to Platinum for each loan. The Eighth Circuit reversed and held that CMI adequately and substantially complied with the contract, which neither specified a form of notice nor indicated that the prescription of a time for cure had to be contained within the notice. Accordingly, the court remanded for further proceedings. View "CitiMortgage, Inc. v. Platinum Home Mortgage, Corp." on Justia Law

US Bank appealed the district court's dismissal of its second amended consolidated complaint as untimely. The Second Circuit affirmed and held that ACE Secs. Corp. v. DB Structured Prods., Inc., 25 N.Y.3d 581 (2015), and Deutsche Bank Nat'l Tr. Co. v. Quicken Loans Inc., 810 F.3d 861, 868 n.8 (2d Cir. 2015), governed U.S. Bank's contractual claims in this case.The court held that the district court properly granted summary judgment to GreenPoint where the first two causes of action for breach of contract were untimely under settled New York law, because they were filed over six years after the statute of limitations began running. The court also held that the district court properly dismissed the third cause of action for indemnification under section 9 of the Flow Mortgage Loan Purchase and Warranties Agreement, because U.S. Bank's claim was in reality a repackaged version of its breach of contract claims. Finally, the court held that the fourth cause of action for breach of the indemnification agreements did relate back to the original filing for claims based on any of the Trusts, and was therefore untimely asserted. View "Lehman XS Trust v. Greenpoint Mortgage Funding, Inc." on Justia Law

The Supreme Court quashed the decision of the Fourth District Court of Appeal on the question of whether a voluntary dismissal provides a basis for being considered the prevailing party for the purpose of appellate attorney fees, holding that the court of appeal improperly denied appellate attorney’s fees based on the bank’s voluntary dismissal of the appeal.Appellant, a homeowner, sought appellate attorney’s fees pursuant to Fla. Stat. 57.105(7) after a bank filed a notice of voluntary dismissal in the court of appeal. The court of appeal concluded that Appellant was not entitled to appellate attorney’s fees because she prevailed on her standing argument presented in the trial court. The Supreme Court quashed the decision below, holding (1) caselaw makes clear that a voluntary dismissal of an appeal renders the opposing party the prevailing party for the purpose of appellate attorney fees; and (2) Appellant was entitled to appellate attorney fees because the bank maintained its right to enforce the reverse mortgage contract in its appeal until the dismissal. View "Glass v. Nationstar Mortgage, LLC" on Justia Law

The receiver filed suit against Associated Bank, which provided banking services to some of the scammers' entities, accusing the bank of aiding and abetting the Ponzi scheme. The Eighth Circuit affirmed the district court's conclusion that there was insufficient evidence to reasonably infer the bank knew about and assisted the scammers' tortious conduct. The court held that a conclusion that the bank aided and abetted the Ponzi scheme could only be reached through considerable conjecture and speculation. In this case, the receiver failed to show that the bank had actual or constructive knowledge of the fraud or that it provided substantial assistance to the tortious conduct. View "Zayed v. Associated Bank, N.A." on Justia Law

The Texas Uniform Fraudulent Transfer Act's good faith affirmative defense does not allow defendants to retain fraudulent transfers received while on inquiry notice of the Ponzi scheme. In this case arising out of the Stanford International Bank Ponzi scheme, the Fifth Circuit reversed the district court's judgment and rendered judgment in favor of plaintiff. Because the jury determined that defendants were on inquiry notice here when they received $79 million in fraudulent transfers, their TUFTA good faith defense was defeated. View "Janvey v. GMAG, LLC" on Justia Law

Consumer banks Hudson and M&T merged. Hudson’s shareholders claimed they violated the Exchange Act, 15 U.S.C. 78n(a), and SEC Rule 14a-9, by omitting facts concerning M&T’s regulatory compliance from their joint proxy materials: M&T’s having advertised no-fee checking accounts but later switching those accounts to fee-based accounts (consumer violations) and deficiencies in M&T’s Bank Secrecy Act/anti-money laundering compliance program. They argued that because the proxy materials did not discuss M&T’s noncompliant practices, M&T failed to disclose significant risk factors facing the merger, rendering M&T’s opinion statements regarding its adherence to regulatory requirements and the prospects of prompt approval of the merger misleading under Supreme Court precedent (Omnicare). The Third Circuit reversed, in part, the dismissal of the suit. The shareholders pleaded actionable omissions under the SEC Rule but failed to do so under Omnicare. The joint proxy had to comply with a provision that requires issuers to “provide under the caption ‘Risk Factors’ a discussion of the most significant factors that make the offering speculative or risky.” It would be reasonable to infer the consumer violations posed a risk to regulatory approval of the merger, despite cessation of the practice by the time the proxy issued. The disclosures were inadequate as a matter of law. View "Jaroslawicz v. M&T Bank Corp" on Justia Law

The Fifth Circuit affirmed the district court's dismissal of plaintiff's claim that the bank was vicariously liable for the failure of the bank's loan servicer to comply with the Real Estate Settlement Procedures Act (RESPA). The court held that plaintiff did not plead an agency relationship between the bank and the loan servicer, an essential element of a vicarious liability claim. Furthermore, even if the bank had an agency relationship with the loan servicer, the bank cannot be held vicariously liable, as a matter of law, for the servicer's alleged RESPA violations. View "Christiana Trust v. Riddle" on Justia Law

The Supreme Court held that Plaintiff, rather than his Bank, must suffer the financial consequences of the complete draining of Plaintiff’s bank account by an identity theft through a series of fraudulent transactions.At issue was Tex. Bus. & Com. Code 4.406(c), which limits the liability of a bank when the customer fails to comply with his or her duties to examine the statement of account and notify the bank of any unauthorized payment. Rather than monitor his account as contemplated by the statute, for more than a year Plaintiff failed to look for missing bank statements or inquire about the status of his account. The court of appeals rendered judgment for Plaintiff, holding that the Bank neither sent the statements to Plaintiff nor made them available to him, and therefore, his statutory duties to examine the statements and report unauthorized transactions never arose. The Supreme Court reversed, holding (1) the Bank made the statements “available” to Plaintiff for purposes of section 4.406; and (2) under the circumstances, section 4.406 precluded Plaintiff’s attempt to hold the Bank liable for the losses. View "Compass Bank v. Calleja-Ahedo" on Justia Law