Law of Banking

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.

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…

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,…

The Consumer Financial Protection Bureau (“CFPB”) issued its final rule setting forth amendments and clarifications to mortgage servicing regulations on August 4, 2016. The final rule will implement new servicing regulations including the following: Additional foreclosure protection for borrowers. If a borrower becomes current on his or her payments after submitting a prior, complete loss mitigation application, mortgage servicers will be required to follow loss mitigation requirements more than once during the life of a…

In Martin v. Federal National Mortgage Association, No. 15-41104 (5th Cir. Feb. 22, 2016), the Fifth Circuit issued its fourth opinion in recent months rejecting a borrower’s assertion that a mortgage servicer waived acceleration of a loan by engaging in conduct inconsistent with acceleration.  The Court noted that Wells Fargo accepted payments only after the borrower’s default in 2009, not after the bank had accelerated the note and that such activity was consistent with the…

Jeff Heck (“Heck”) sued CitiMortgage, Inc. (“CitiMortgage”) over CitiMortgage’s failure to allow his purchase of real property at a non-judicial foreclosure sale after Heck successfully bid on the foreclosure property, was given 20 minutes to obtain a cashier’s check, did not return in the allotted time and the property was sold to another buyer.  In affirming the trial court’s dismissal of Heck’s lawsuit, the United States Court of Appeals for the Fifth Circuit found that…

The Federal Deposit Insurance Corporation (FDIC) is the newest entity in a long line of governmental and corporate interests to voice concern over cybersecurity measures taken by banks and other financial institutions. The FDIC recently published its Supervisory Insights Vol. 12, Issue 2, Winter 2015 Article laying out a framework for enhancing cybersecurity for banks and financial institutions. The FDIC article focuses on the threats posed by cyber-attacks to banks and financial institutions, and how…

In light of the recent data breach at Hyatt Hotels, which affected 250 hotels in 50 countries, we thought it timely to discuss the fallout from another hotel data breach: namely, the recent consent order entered in the FTC’s action against the Wyndham hotel chain.[1] This post discusses the Wyndham consent order and FTC guidance based on numerous similar orders. If your business is not at least attempting to comply with the general best practices…

Last week, the Government Accountability Office released a report indicating that the Dodd-Frank Wall Street Reform has imposed increasing compliance burdens on community banks, credit unions, and industry associations. These typically smaller institutions have had to increase staff and dedicate more time and money to training in order to comply with the new rules. Some industry representatives indicated that new CFPB qualified mortgage standards could affect mortgage lending activities of credit unions and community banks,…