The London Interbank Offered Rate (“LIBOR”) is a nearly 50-year old global borrowing benchmark which underpins more than $350 trillion of financial products. LIBOR is based on daily submissions from a panel of banks estimating the interest rate on which they estimate they would be able to borrow funds from one another in five different […]
Are Your Loan Documents Ready For The Death Of LIBOR?
Overdraft Policies Require More Than Compliance With Regulation E
In the past few years, the Consumer Financial Protection Bureau (“CFPB”) has focused on taking action against multiple financial institutions for their overdraft services practices. These practices are regulated by the Federal Reserve Board’s “Regulation E”, as restated by the CFPB in 12 C.F.R. § 1005.17. Regulation E prohibits financial institutions from assessing overdraft fees […]
U.S. Supreme Court Dismisses Writ in Recharacterization of Debt Proceeding
Late last week, the United States Supreme Court said that it erred when it granted certiorari to resolve a bankruptcy dispute over whether state or federal law should apply to the recharacterization of debt. In In re Province Grande Olde Liberty, LLC, the Fourth Circuit affirmed the judgment of the bankruptcy court and district court, both […]
U.S. Supreme Court Grants Certiorari to Decide Circuit Split on Applicable Law for the Recharacterization of Debt
The United States Supreme Court will soon decide whether state or federal law will apply to the recharacterization of debt. On June 27, 2017, the Court granted certiorari in In re Province Grande Olde Liberty, LLC, a decision out of the Fourth Circuit. In Province Grande, the Fourth Circuit affirmed the judgment of the bankruptcy […]
In Judge Gorsuch’s first opinion, the U.S. Supreme Court rules that an entity that purchases debt and then collects that debt is not a “debt collector.”
On June 12, 2017, Judge Gorsuch issued his first written opinion since taking the bench on the Supreme Court. In Henson vs. Santander Consumer USA, the Supreme Court ruled unanimously that a company that purchases defaulted loans and then attempts to collect on those loans is not a “debt collector” under the FDCPA because the company […]
U.S. Supreme Court Refuses To Apply FDCPA To Purchasers Of Debt But Leaves Potential Arguments For Applicability Undecided
The Fair Debt Collection Practices Act (“FDCPA”) authorizes private lawsuits and fines to deter abusive collection efforts by “debt collectors”—a term defined under 15 U.S.C. §1692a(6) to include anyone who “regularly collects or attempts to collect … debts owed or due … another.” In the June 12, 2017 opinion in Henson et al. v. Santander […]
Can An Unexecuted Loan Modification Coupled With Performance Satisfy The Statute Of Frauds? A Simple Step Can Help Your Financial Institution Avoid Being The First To Find Out In Texas.
No Texas Court has considered whether a written offer to enter into a loan modification satisfies the requirement under Texas law—known as the statute of frauds—that all loan agreements over $50,000 must be in writing and signed by the party to be bound. However, the Fifth Circuit’s June 5, 2017 opinion in Owens v. Specialized […]
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
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 […]
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 […]
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. […]