Justia Banking Opinion Summaries

At issue in this case was Connecticut’s debt negotiation statutes, Conn. Gen. Stat. 36a-671 through 36a-671e, which authorize the Banking Commissioner to license and regulate persons engaged in the debt negotiation. Plaintiff, a national consumer advocate law firm, petitioned the Commissioner for a declaratory ruling stating that Plaintiff qualified for exemption from the debt negotiation statutes under the attorney exception. This exception exempts only those attorneys admitted to the practice of law in Connecticut who engage or offer to engage in debt negotiation as an ancillary matter to the attorneys’ presentation of a client. The Commissioner concluded that Plaintiff did not qualify for exemption. The superior court affirmed. The Supreme Court reversed, holding that the debt negotiation statutes impermissibly intrude on the Judicial Branch’s exclusive authority to regulate attorney conduct and licensure and, therefore, violate the separation of powers provision contained in article II of the state Constitution. View "Persels & Assocs., LLC v. Banking Comm’r" on Justia Law

Avila bought his Chicago home with a $100,500 CitiMortgage loan. Five years later, a fire made the house uninhabitable. Avila’s insurance carrier paid out $150,000. CitiMortgage took control of the proceeds and paid $50,000 to get the restoration underway. CitiMortgage later inspected the work and found that it needed to be redone. By then Avila had missed several mortgage payments. CitiMortgage applied the remaining $100,000 toward Avila’s outstanding mortgage loan. Avila’s home was not repaired. CitiMortgage never claimed that restoration was economically infeasible or would reduce its security interest. Nor had any of three special conditions described in the mortgage occurred. Avila sued, alleging breach of fiduciary duty and the mortgage contract, seeking to represent a class of defaulting CitiMortgage borrowers whose insurance proceeds had been applied to their mortgage loans rather than repairs. The district court dismissed, reasoning that the allegations did not support a fiduciary duty on CitiMortgage’s part and Avila was barred from pursuing his contract claim because he had materially defaulted on his own obligations. The Seventh Circuit agreed that allegations of a fiduciary relationship were inadequate as a matter of law, but held that a claim that the mortgage agreement remained enforceable after his missed payments was plausible in light of the agreement’s structure and the remedies it prescribes in the event of default. View "Avila v. CitiMortgage, Inc." on Justia Law

The City filed three separate fair housing lawsuits against Wells Fargo, Bank of America, and Citigroup, alleging that each bank had engaged in a decade-long pattern of discriminatory lending by targeting minorities for predatory loans. Each complaint contained the same two causes of action: one claim arising under the Fair Housing Act (FHA), 42 U.S.C. 3601 et seq., as well as an unjust enrichment claim under Florida law. The district court dismissed the City's FHA claim. The court found that the City has constitutional standing to pursue its FHA claims; under controlling Supreme Court precedent, the “zone of interests” for the FHA extends as broadly as permitted under Article III of the Constitution, and therefore encompasses the City’s claim; while the court agreed with the district court that the FHA contains a proximate cause requirement, the court found that this analysis is based on principles drawn from the law of tort, and that the City has adequately alleged proximate cause; and the court concluded that the “continuing violation doctrine” can apply to the City’s claims, if they are adequately pled. The court concluded that the district court erred in dismissing the City’s federal claims with prejudice and in denying the City’s motion for leave to amend on the grounds of futility because the district court imposed too stringent a zone of interests test and wrongly applied the proximate cause analysis. The court affirmed the dismissal of the state law claim because the benefits the City allegedly conferred on the defendants were not sufficiently direct to plead an unjust enrichment claim under Florida law. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "City of Miami v. CitiGroup Inc." on Justia Law

The City filed three separate fair housing lawsuits against Wells Fargo, Bank of America, and Citigroup, alleging that each bank had engaged in a decade-long pattern of discriminatory lending by targeting minorities for predatory loans. Each complaint contained the same two causes of action: one claim arising under the Fair Housing Act (FHA), 42 U.S.C. 3601 et seq., as well as an unjust enrichment claim under Florida law. The district court dismissed the City's FHA claim. The court found that the City has constitutional standing to pursue its FHA claims; under controlling Supreme Court precedent, the “zone of interests” for the FHA extends as broadly as permitted under Article III of the Constitution, and therefore encompasses the City’s claim; while the court agreed with the district court that the FHA contains a proximate cause requirement, the court found that this analysis is based on principles drawn from the law of tort, and that the City has adequately alleged proximate cause; and the court concluded that the “continuing violation doctrine” can apply to the City’s claims, if they are adequately pled. The court concluded that the district court erred in dismissing the City’s federal claims with prejudice and in denying the City’s motion for leave to amend on the grounds of futility because the district court imposed too stringent a zone of interests test and wrongly applied the proximate cause analysis. The court affirmed the dismissal of the state law claim because the benefits the City allegedly conferred on the defendants were not sufficiently direct to plead an unjust enrichment claim under Florida law. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "City of Miami v. Wells Fargo & Co." on Justia Law

The City filed suit against the Bank, alleging that the Bank engaged in a decade-long pattern of discriminatory lending in the residential housing market that caused the City economic harm. The City asserts a claim arising under the Fair Housing Act (FHA), 42 U.S.C. 3601 et seq., as well as an unjust enrichment claim under Florida law. The district court dismissed the City's FHA claim with prejudice. The court found that the City has constitutional standing to pursue its FHA claims; under controlling Supreme Court precedent, the “zone of interests” for the FHA extends as broadly as permitted under Article III of the Constitution, and therefore encompasses the City’s claim; while the court agreed with the district court that the FHA contains a proximate cause requirement, the court found that this analysis is based on principles drawn from the law of tort, and that the City has adequately alleged proximate cause; and the court concluded that the “continuing violation doctrine” can apply to the City’s claims, if they are adequately pled. The court concluded that the district court erred in dismissing the City’s federal claims with prejudice and in denying the City’s motion for leave to amend on the grounds of futility because the district court imposed too stringent a zone of interests test and wrongly applied the proximate cause analysis. The court affirmed the dismissal of the state law claim because the benefits the City allegedly conferred on the defendants were not sufficiently direct to plead an unjust enrichment claim under Florida law. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "City of Miami v. Bank of America Corp." on Justia Law

In 2004, Laura Sheedy refinanced property she owned. For the transaction, Sheedy executed a promissory note and mortgage in favor of Washington Mutual Bank (WAMU). The mortgage was eventually assigned to Deutsche Bank National Trust Company. JPMorgan Chase National Association (Chase) serviced the loan. Deutsche Bank subsequently commenced foreclosure proceedings. Thereafter, in 2010, Sheedy filed for protection under Chapter 13 of the Bankruptcy Code. As part of her plan, Sheedy raised a series of allegations of lender liability. In 2011, Sheedy filed this adversary proceeding to have the bankruptcy court resolve her lender liability claims, adding that Deutsche Bank and Chase (together, the Secured Creditors) were liable for fraud deceit, and misrepresentation on the basis that WAMU provided her with inaccurate or false information concerning the terms of the note and the mortgage. The bankruptcy court granted summary judgment in favor of the Secured Creditors. The district court affirmed. The First Circuit affirmed, holding that all of Sheedy’s claims were either time-barred or without merit. View "Sheedy v. Deutsche Bank Nat’l Trust Co." on Justia Law

In 2007 fraudulent checks in the amount of $181,577 were cashed against the accounts of seven Citizens Bank customers in New York, Pennsylvania, and Delaware. Fraud investigator Swoyer discovered that Tolliver’s employee number was the only one used to access all of the accounts; only Tolliver and one assistant manager worked on all of the days on which the accounts were accessed.. Swoyer, Postal Inspector Busch, and a Secret Service agent interviewed Tolliver. At trial, Swoyer testified that he reviewed Tolliver’s entire logbook with her and that Tolliver told him that she had not given her password to anyone and that she always logged off her computer when she walked away from a terminal. Seven of Tolliver’s former co-workers testified they never knew Tolliver’s password or saw it written down. A jury convicted Tolliver of bank fraud, 18 U.S.C. 1344, aggravated identity theft, 18 U.S.C. 1028A(a), and unauthorized use of a computer, 18 U.S.C. 1030. The court imposed a below-Guidelines sentence of 30 months’ imprisonment and restitution. The Third Circuit affirmed. Tolliver, represented by newly appointed counsel, filed a 28 U.S.C. 2255 motion, claiming that her trial counsel was ineffective by failure to investigate. The district court granted her motion without holding an evidentiary hearing. The Third Circuit vacated. View "United States v. Tolliver" on Justia Law

Plaintiff filed a public records request under the Government Records Access and Management Act (GRAMA) seeking bank records the State had legally seized during a criminal investigation. The district court denied the request, concluding that article I, section 14 of the Utah Constitution provides a broad right of privacy that prevented the State from disclosing the records. The district court also denied Plaintiff access to a summary of the bank records (the Quicken Summary) and an investigator’s handwritten notes (the Post-it Note), concluding that both documents were protected attorney work product. The Supreme Court reversed, holding (1) there can be no violation of section 14 when the government obtains information through a valid warrant or subpoena, and therefore, the bank records were not exempted from GRAMA’s public disclosure requirements; and (2) the district court correctly classified the Quicken Summary and the Post-it Note as attorney work product, but, because the State terminated its investigation years ago, the interests favoring protection were not as compelling as those favoring disclosure. View "Schroeder v. Utah Attorney General’s Office" on Justia Law

Bell alleged that her former employer, PNC Bank, failed to pay her overtime wages in violation of the Fair Labor Standards Act, 29 U.S.C. 201, and the Illinois Minimum Wage and Wage Payment and Collection Acts, and that the failure was not an isolated incident, but rather part of a PNC policy or practice that affected other employees. Bell claimed that she was evaluated, in part, based on how many new accounts she brought into the bank, and in order to generate new accounts she needed to spend “significant” time outside of her regular work hours visiting prospective clients. Some of the assignments to visit prospective clients came from a PNC vice president who did not work at the Bell’ branch. According to Bell, when she submitted time cards reflecting overtime work, her branch manager and a PNC regional manager told her that “PNC would not permit... overtime for the branch,” and “PNC expected its employees to handle their outside-the-branch work on their own time, without reporting any extra hours that they worked.” The Seventh Circuit affirmed certification of a class of plaintiffs. Many issues remain unanswered and the district court was correct to conclude that a class action would be an appropriate and efficient pathway to resolution. View "Bell v. PNC Bank" on Justia Law

Plaintiffs, owner of Fiscal Agency Agreement (FAA) bonds that were not restructured, filed suit against BCRA seeking to recover their unpaid principal and interest. The district court held that the FAA's express waiver of sovereign immunity, pursuant to 28 U.S.C. 1605(a)(1), also waived BCRA's immunity because BCRA is Argentina’s “alter ego.” The district court further held that BCRA’s use of its account with the Federal Reserve Bank of New York (FRBNY) constituted “commercial activity” in the United States, which waived BCRA’s sovereign immunity under 28 U.S.C. 1605(a)(2). The court concluded that it has jurisdiction over the appeal under the collateral-order doctrine; Argentina’s sovereign‐immunity waiver in the FAA may not be imputed to also waive BCRA’s independent sovereign immunity; and BCRA’s use of its FRBNY account is too incidental to the gravamen of plaintiffs’ claim to serve as the basis for waiving BCRA’s sovereign immunity under the commercial‐activity exception to the FSIA. Accordingly, the court reversed and remanded with instructions to dismiss the complaint. View "EM Ltd. v. Banco Central de la Republica Argentina" on Justia Law