The Fifth Circuit recently confirmed that lenders and/or servicers cannot raise the statute of limitations as a defense where borrowers claim that a home equity loan fails to comply with the Texas Constitution. In Ocwen Loan Servicing v. Robert M. Berry, the Fifth Circuit vacated and remanded a summary judgment granted in favor of Ocwen Loan Servicing (“Ocwen”) in relation to a Texas home equity loan. In 2007, Robert Berry took out a home equity…
Fifth Circuit Confirms That Constitutionally Non-Compliant Home Equity Liens Are Invalid And That No Statute Of Limitations Applies To A Quiet Title Action Alleging Such Violations
Third Circuit Ruling Could Reduce Value Of Modified Loans Serviced Under Fannie Mae And Freddie Mac Guidelines
The value of modified home loans serviced under Fannie Mae and Freddie Mac guidelines could be diminished by a March 9, 2017 ruling against JP Morgan Chase Bank in Fried v. JP Morgan Chase & Co., No. 16-3069, 2017 WL 929752 (3d. Cir. Mar 9, 2017). The ruling calls into question the manner in which the termination deadline for private mortgage insurance (“PMI”) should be calculated. But more significantly, it creates questions regarding the value…
Seventh Circuit Finds That Bank May Have Right To Sue Its Regulator Over Camels Rating
In the summer of 2016, Builders Bank of Chicago, Illinois was informed that its Camels rating—a risk-profile metric assigned by banking regulators—had reached a 4. This is the threshold at which a financial institution is considered a “problem bank” by regulators and has a significant impact on the insurance premium paid by the financial institution. But Builders Bank did not accept its Camels rating and took the unusual action of filing suit against the Federal…
New York Cybersecurity Regulations Impacting Financial Services Companies And Their Vendors Are Effective March 1, 2017 And Likely Foreshadow Forthcoming Regulations In Other States.
“First-in-the-nation” regulations issued by the New York Department of Financial Services (“NYDFS”) which require that financial services companies implement cybersecurity programs are effective March 1, 2017 and will phase in over a period of two years. The NYDFS regulations specifically apply to financial services firms that operate under a license, registration, charter, certificate, permit, accreditation or similar authorization by the NYDFS. The list of affected parties includes banks, credit unions, insurance companies, licensed lenders and…
The Consumer Review Fairness Act Impacts Form Consumer Contracts Used by Financial Services Companies.
This blog previously addressed the Consumer Financial Protection Bureau’s (“CFPB”) complaints database. Each week the CFPB receives and publishes thousands of consumer complaints about financial products and services. But what if financial services companies included nondisparagement or similar language in their consumer loan documents prohibiting CFPB complaints or negative online reviews? This sort of language may be covered by the Consumer Review Fairness Act. The Consumer Review Fairness Act makes any provision of a form…
Regional and community banks: proposed federal cybersecurity regulations don’t apply to you (yet) but do offer valuable strategies.
Executive summary Federal regulators have issued an advance notice of new proposed cybersecurity standards. The notice invites comment on enhanced cybersecurity standards for regulated entities with total assets of $50 billion and certain of their service providers. The potential new standards don’t apply (yet) to regional or community banks. But those banks should consider implementing aspects of the proposed standards into their cybersecurity practices, consistent with their resources and perceived risks. Specifically, the proposed standards…
The Supreme Court Will Answer Whether Collection of Time-Barred Debt in Bankruptcy Violates the Fair Debt Collection Practices Act
Lots of people and companies buy old debt—for example, hedge funds, private equity firms, and even some commercial bank affiliates. Typically, this is debt that the original creditor has charged off and sold for a fraction of the legal balance. In some cases, the debt has grown so old that a statute of limitations makes it technically unenforceable. But that doesn’t always stop the debt buyer from attempting collection. A few weeks ago, Jeff Novel…
Fifth Circuit holds bank overtime claims should be arbitrated, providing guidance on employer-friendly delegation clauses.
Readers may be interested in my latest post on the Law in the Workplace Blog. It discusses a recent Fifth Circuit decision requiring that a bank employee arbitrate his class action Fair Labor Standards Act claim.
New York’s Proposed Banking Cybersecurity Regulation, And Why It’s Relevant To Community And Regional Banks Outside Of New York.
On September 13, 2016, New York’s Department of Financial Services announced a proposed new cybersecurity regulation covering banks, insurance companies, and other financial service providers. The regulation goes into effect on January 1, 2017. In sum, the proposed regulation requires covered entities to: establish a cybersecurity program; adopt a written cybersecurity policy addressing a range of required topics; designate a Chief Information Security Officer (“CISO”) responsible for implementing the cybersecurity program and reporting to the…
Attempts To Collect Time-Barred Debt Provide Fertile Ground For FDCPA Violations In The Fifth Circuit
In Daugherty v. Convergent Outsourcing, Inc., the Fifth Circuit Court of Appeals held that a collection letter that is silent as to litigation, but which offers to “settle” a time-barred debt without acknowledging that such debt is judicially unenforceable, can be sufficiently deceptive or misleading as to violate the Fair Debt Collection Practices Act (“FDCPA”). According to her complaint, Roxanne Daugherty accumulated $12,824.24 in credit card debt. After Daugherty defaulted on the debt, LVNV Funding,…