The Fair Debt Collection Practices Act (FDCPA) prohibits abusive, unfair, and deceptive debt collection practices, but it applies only to debt collectors. Earlier this week, the Supreme Court was asked to determine who qualifies as a “debt collector.” The court unanimously ruled that a bank or financial services company attempting to collect a debt that it owns—even if the debt was purchased from another lender—is not a “debt collector” subject to the requirements of the FDCPA.
A federal appeals court in Chicago recently ruled that Builders Bank could move forward with a lawsuit against the FDIC challenging the bank’s CAMELS rating. Although the decision noted the uphill battle of challenging regulators’ CAMELS ratings in court, it opens the door to such suits by finding that banks may have the right to challenge all but the capital portion of the CAMELS rating.
Home Depot has agreed to pay more than $25 million to settle a class action lawsuit brought by banks and credit unions stemming from the store’s 2014 data breach. Home Depot previously settled with credit card issuers and some financial institutions, but other banks filed a separate lawsuit to recoup their costs of reissuing debit and credit cards and other losses. This is one of the more successful settlements in data breach litigation and demonstrates that such litigation may be a useful way for banks to recoup losses.
Last month, the Department of Justice (DOJ) filed a civil rights lawsuit accusing KleinBank, a Minnesota-based community bank, of violating fair lending laws by engaging in the practice of “redlining” by denying mortgage loans to predominantly minority neighborhoods. The DOJ’s complaint alleges that KleinBank “engaged in a pattern or practice of unlawful redlining by structuring its residential mortgage lending business so as to avoid serving the credit needs of neighborhoods where a majority of residents are individuals of racial and ethnic minorities, in violation of the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA).”
Anyone who has owned or managed a business knows that the Americans with Disabilities Act (ADA) requires that public spaces be accessible to individuals with disabilities. And many bankers will remember the class action litigation surrounding ATM accessibility several years ago. Now a new wave of litigation is targeting banks and other businesses over the accessibility of their websites. Led by the same law firm that spearheaded the ATM accessibility litigation (Carlson Lynch Sweet & Kilpela), lawyers are sending letters to banks demanding that they make their websites more accessible and pay attorneys’ fees. This post sets out best practices for making your bank’s website ADA compliant and provides tips on what to do if you receive a demand letter from a lawyer.
With major changes coming in Washington and important cases making their way through the court system, 2017 looks to be a busy year for bank litigation and regulation. This includes litigation and legislative challenges to the CFPB’s authority, enforcement actions involving allegations of unsafe and unsound banking practices, lawsuits over the validity of credit union regulations, and litigation surrounding the Wells Fargo fake account scandal.
The American Bankers Association (ABA) has sued the National Credit Union Administration (NCUA), challenging a new rule that expands credit unions’ field of membership to large geographic areas. The ABA’s lawsuit comes just three months after the Independent Community Bankers of America (ICBA) sued the NCUA to block a rule change that would expand credit unions’ ability to make commercial loans. The ABA’s lawsuit seeks to prevent the NCUA from implementing its new membership rule and “expanding credit union operations well beyond the limits established by Congress.”