Justia Banking Opinion Summaries

The Fifth Circuit affirmed the district court's judgment against Midwest in an action alleging that the Bank was liable under Mississippi statutory and common law for its participation in a scheme involving fraudulent checks. The court held that Midwest lacked a cause of action under Mississippi Code 75-3-404(d); the Bank did not owe a duty of reasonable care to Midwest, a non-customer; Midwest failed to allege the existence of a civil conspiracy; Midwest failed to plausibly allege a conversion claim under Mississippi Code 75-3-420; and the district court did not abuse its discretion by dismissing as moot Midwest's motion for sanctions. View "Midwest Feeders, Inc. v. Bank of Franklin" on Justia Law

The First Circuit affirmed the district court’s order dismissing a suit that challenged the lawfulness of a 2012 foreclosure sale of a Massachusetts home.In their complaint, Plaintiffs, who formerly owned the property at issue, alleged that Defendants - OneWest Bank, Indymac Mortgage Services, Ocwen Servicing, and the Federal National Mortgage Association - had engaged in unfair and predatory mortgage lending and loan servicing practices. The complaint set forth nine claims. The district court granted Defendants’ motion to dismiss all of the claims. The First Circuit affirmed, holding that the district court did not err in (1) dismissing three claims for which Plaintiffs sought a judgment declaring that the foreclosure sale was void; (2) dismissing for lack of standing the claim in which Plaintiffs sought to quiet title; (3) dismissing the claim for breach of the duty of good faith and reasonable diligence on the basis that there was no such duty; and (4) dismissing Plaintiffs’ remaining claims. View "Flores v. OneWest Bank, F.S.B." on Justia Law

The circuit court applied the proper standard of law to the facts of record when it concluded that Nationstar Mortgage LLC acted in bad faith and then awarded attorney fees to Robert Stafsholt. Further, Nationstar may collect interest on the principal amount of the loan accrued during litigation because Stafsholt would receive a windfall if he was both excused from paying interest and received his attorney fees. Specifically, the Supreme Court held (1) circuit courts may include attorney fees as part of an equitable remedy “in exceptional cases and for dominating reasons of justice”; and (2) the circuit court properly exercised its discretion in this case. View "Nationstar Mortgage LLC v. Stafsholt" on Justia Law

AT&T notified Walton that she owed $268.47 on her closed AT&T account number 119864170 and that failure to pay “may cause your account to be referred to an outside collection agency.” Walton did not pay the bill. She received a debt-collection letter from EOS, stating that she owed AT&T $268.47 on account 864119170. AT&T had swapped the first three digits with the second three in providing the information. Walton contacted EOS, acknowledged that her name and mailing address were correct, but falsely denied that the last four digits of her social security number matched those the representative gave to confirm her identity. After investigating, EOS sent Walton another letter stating it had verified that her name, address, and her social security number, and stating a balance of $268.47. EOS again listed an incorrect account number. EOS reported Walton’s debt to credit-reporting agencies, informing them that the account was disputed. Walton wrote to the agencies to dispute the debt; the agencies notified EOS. After learning that she disputed the account number, EOS advised the agencies to delete Walton’s debt record. Walton sued under the Fair Debt Collection Practices Act, 15 U.S.C. 1692, for not verifying her debt with the creditor, and the Fair Credit Reporting Act, 15 U.S.C. 1681, for not reasonably investigating the disputed information. The Seventh Circuit affirmed summary judgment, finding that EOS complied with its statutory obligations. View "Walton v. EOS CCA" on Justia Law

California Pacific Bank petitioned for review, challenging the constitutionality of the Banking Secrecy Act (BSA), 31 U.S.C. 5311-5330, and its implementing regulations, and alleged that the FDIC Board of Directors' decision, which found that the Bank violated the BSA and ordered it to implement a plan to bring the Bank into compliance, was not supported by substantial evidence. The Ninth Circuit denied the petition for review, holding that the Bank did not waive its constitutional challenges; the BSA and its implementing regulations were not unconstitutionally vague; neither the FDIC's investigation nor the ALJ was unconstitutionally biased against the Bank; the FDIC acted in accordance with the law by relying on the Federal Financial Institutions Examination Council Manual to clarify its four pillars regulation; and the FDIC Board's decisions were supported by substantial evidence. View "California Pacific Bank v. FDIC" on Justia Law

California Pacific Bank petitioned for review, challenging the constitutionality of the Banking Secrecy Act (BSA), 31 U.S.C. 5311-5330, and its implementing regulations, and alleged that the FDIC Board of Directors' decision, which found that the Bank violated the BSA and ordered it to implement a plan to bring the Bank into compliance, was not supported by substantial evidence. The Ninth Circuit denied the petition for review, holding that the Bank did not waive its constitutional challenges; the BSA and its implementing regulations were not unconstitutionally vague; neither the FDIC's investigation nor the ALJ was unconstitutionally biased against the Bank; the FDIC acted in accordance with the law by relying on the Federal Financial Institutions Examination Council Manual to clarify its four pillars regulation; and the FDIC Board's decisions were supported by substantial evidence. View "California Pacific Bank v. FDIC" on Justia Law

Adrian established Red Brick Properties, to purchase, rehabilitate, and resell homes. Adrian's wife, Daniela, the only employee with a real estate license, served as office manager. They sought buyers who did not have good enough credit or a down payment and assisted them in applying for mortgage loans. In 2007-2009, Red Brick sold 45 houses, providing the down payment for each sale; the loan applications falsely stated that the buyers were using their own money. After closing, Red Brick provided the buyers with additional money, to ensure that they could make at least two payments before defaulting. Bank of America which provided the loans for 32 sales, all processed by one loan officer, opened an investigation. A jury convicted Adrian and Daniela of wire fraud, 18 U.S.C. 1343 and conspiracy to commit wire fraud, 18 U.S.C. 1349. Following a remand, the PSR recommended a total loss amount of $1,835,861; the court sentenced Adrian to 36 months’ imprisonment, Daniela to 21 months’ (both sentences were below the Guidelines range), and imposed a $30,000 fine on each. The Seventh Circuit affirmed, rejecting a challenge to the intended loss calculation under U.S.S.G. 2B1.1, and the decision to deny Daniela a minor-role reduction under U.S.S.G. 3B1.2. Bank of America’s losses qualified as an “intended loss” regardless of its level of complicity. View "United States v. Tartareanu" on Justia Law

Wis. Stat. 846.165 does not require a circuit court to make a determination of a guaranty credit at the time a foreclosure sale is confirmed. Further, when an action for foreclosure against a mortgagor and an action for a money judgment on a guaranty are brought in the same proceeding, the circuit court may decide the amount of a credit to be applied to a judgment on a guaranty either at the time the sale is confirmed or at another time.Petitioner sought review of the court of appeals' decision directing that the circuit court apply a credit of $2.25 million to a money judgment entered against Petitioner as a guarantor of a loan. Petitioner argued that the court of appeals erroneously limited the credit to the amount of the winning bid at the sheriff’s sale, thus precluding the circuit court from hearing evidence of the fair value of the property after the confirmation of sale. The Supreme Court reversed, holding (1) the circuit court properly decoupled the confirmation of sale from the determination of the guaranty credit; and (2) the stipulation in this case did not establish that the amount of the winning bid at the sheriff’s sale shall be the sole credit toward the money judgment against Petitioner. View "Horizon Bank, National Ass’n v. Marshalls Point Retreat LLC" on Justia Law

Although the Dodd-Frank Act significantly altered the regulatory framework governing financial institutions, with respect to National Bank Act (NBA) preemption, it merely codified the existing standard established in Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25 (1996). The Ninth Circuit applied that standard and held that the National Bank Act did not preempt California's state escrow interest law. In this case, the panel reversed the district court's dismissal of a putative class action alleging that Bank of America violated both California state law and federal law by failing to pay interest on his escrow account funds. The panel held that plaintiff could proceed with his California Unfair Competition Law and breach of contract claims against Bank of America. View "Lusnak v. Bank of America" on Justia Law

Enacted in 2005, in response to the "debt treadmill," NRS Chapter 604A regulates the payday loan industry, including deferred deposit loans and loans with an annual interest rate greater than 40 percent. If a borrower cannot repay such a loan within 35 days, NRS 604A.480 subsection 1 allows for an extension but a licensee cannot extend the period beyond 60 days and cannot "add any unpaid interest or other charges accrued ... to the principal amount of the new deferred deposit loan or high-interest loan." However, under subsection 2, certain new deferred deposit or high-interest loans are exempt from those restrictions: A licensee may offer a new loan to satisfy an outstanding loan for a period of not less than 150 days and at an interest rate of less than 200 percent. The licensee must follow all of subsection 2's requirements for the new loan to be exempted. Subsection (2)(f) permits a loan under subsection 2 if the licensee does “not commence any civil action or process of alternative dispute resolution on a defaulted loan or any extension or repayment plan thereof." Reversing the district court, the Nevada Supreme Court held that NRS 604A.480(2)(f) bars a licensee from bringing any type of enforcement action on a refinancing loan made under NRS 604A.480(2) and is not merely a condition precedent to making a refinancing loan under the subsection. View "State of Nevada Department of Business and Industry, Financial Institutions Division v. Dollar Loan Center., LLC" on Justia Law