- Volume 6, Issue #4
- GE Capital To Pay $169 Million To Settle Credit Card Allegations
WASHINGTON, D.C. - The Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) on June 19 announced a settlement to resolve allegations that GE Capital Retail Bank, known as of this month as Synchrony Bank, "engaged in a nationwide pattern or practice of discrimination by excluding Hispanic borrowers from two of its credit card debt-repayment programs," the federal government's largest credit card discrimination settlement ever, according to the DOJ (United States of America v. Synchrony Bank, formerly known as GE Capital Retail Bank, No. 14-0454, D. Utah).
- Company President Will Pay $25 Million To Settle FTC Claims
LAS VEGAS - The president of a company that the Federal Trade Commission said made more than $24 million via unauthorized debits and charges to victims' credit cards has agreed to pay $25 million to settle the FTC's charges, according to a stipulated order for permanent injunction and monetary judgment a Nevada federal judge issued June 5 (Federal Trade Commission v. Ideal Financial Solutions Inc., et al., No. 13-0143, D. Nev.)
- Federal Judge Grants Approval To Credit Card Fee Settlement
ORLANDO, Fla. - A federal judge in Florida on May 29 granted preliminary approval to a $10 million settlement that would allow Bank of America NA (USA) to exit a class action alleging that the bank charged late fees to the credit card accounts of consumers who made their payments on time (Heydee De Leon v. Bank of America NA (USA), No. 09-1251, M.D. Fla.).
- 8th Circuit: Sam's Club Credit Card Violation Wasn't Willful
ST. LOUIS - Sam's Club violated the Fair and Accurate Transactions Act (FACTA) by disclosing parts of credit card numbers on receipts, but the violation was not willful, the Eighth Circuit U.S. Court of Appeals said June 5, affirming the dismissal of a putative class action (Steven E. Hammer, et al. v. Sam's East, et al., Nos. 12-3724, 12-3858, 8th Cir.; 2014 U.S. App. LEXIS 10452).
- Redbox Didn't Violate Credit Card Statute, 9th Circuit Holds
SAN FRANCISCO - Redbox Automated Retail LLC did not violate California's Song-Beverly Act because its collection of customer information fell within an exception where the customer's credit card was used as a deposit to secure payment in the event of loss or late return, the Ninth Circuit U.S. Court of Appeals said June 6, affirming a federal court's dismissal of a putative class action (John Sinibaldi, et al. v. Redbox Automated Retail LLC, No. 12-55234, 9th Cir.; 2014 U.S. App. LEXIS 10556).
- Merchant Agrees To Settle Claims Against Credit Card Processor
MIAMI - A cruise company has agreed to the settlement of a suit in which it alleged that a bank and credit card processor charged an acquirer support fee (ASF) and chargeback insurance fees that were not included or scheduled in a credit card processing service agreement, according to a document the cruise company filed in a Florida federal court (MSC Cruises $(USA$) Inc. v. Merrick Bank Corp., et al., No. 13-23462, S.D. Fla.).
- Panel Overturns Order Rejecting $285M Settlement Between SEC, Citigroup
NEW YORK - A Second Circuit U.S. Court of Appeals panel on June 4 vacated a federal judge's order rejecting the Securities and Exchange Commission's $285 million proposed settlement with Citigroup Global Markets Inc. over alleged misstatements made regarding the investment quality of a collateralized debt obligation (CDO), ruling that the judge abused his discretion (U.S. Securities and Exchange Commission v. Citigroup Global Markets Inc., Nos. 11-5227, 11-5375 and 11-5242, 2nd Cir.).
- Supreme Court Remands Mortgage-Backed Securities Lawsuit To 10th Circuit
WASHINGTON, D.C. - The U.S. Supreme Court on June 16 vacated a lower court ruling denying dismissal of a consolidated National Credit Union Administration (NCUA) lawsuit against several financial institutions over their sale of residential mortgage-backed securities (RMBS) to two failed credit unions in violation of federal securities law (Nomura Home Equity Loan, et al. v. National Credit Union Administration, No. 13-576, U.S. Sup.).
- Shareholder Failed To Plead Scienter In Securities Class Action, Panel Rules
NEW YORK - A federal district court judge did not err in dismissing a securities class action lawsuit against Bank of America Corp. (BofA) because the judge properly determined that the shareholder failed to properly plead scienter in making its federal securities law claims, a Second Circuit U.S. Court of Appeals panel ruled May 19 (In re Bank of America AIG Disclosure Securities Litigation, No. 13-4422, 2nd Cir.; 2014 U.S. App. LEXIS 9197).
- D.C. Circuit: Shareholders Failed To Plead Any Material Misrepresentation
WASHINGTON, D.C. - A federal judge did not err in dismissing a securities lawsuit against an investment corporation and others because shareholders failed to plead a material misrepresentation, a District of Columbia Circuit U.S. Court of Appeals panel ruled May 20 (D.J. Wu, et al. v. John Crumpton Stomber, et al., No. 12-7088, D.C. Cir.; 2014 U.S. App. LEXIS 9292).
- Securities Claims Dismissed As Untimely Against Morgan Stanley, Others
NEW YORK - A federal judge in New York on May 27 dismissed shareholders' claims that Morgan Stanley & Co. and others violated provisions of the federal securities laws by misrepresenting the investment quality of the securities they sold, ruling that the claims of certain new plaintiffs were untimely (In re Morgan Stanley Mortgage Pass-Through Certificates Litigation, No. 09-2137, S.D. N.Y.; 2014 U.S. Dist. LEXIS 72702).
- High Court Dismisses JPMorgan Chase From Madoff Suit
WASHINGTON, D.C. - The U.S. Supreme Court on June 9 granted a stipulation of dismissal of claims against JPMorgan Chase & Co. Inc. and certain of its subsidiaries in a securities lawsuit filed by the trustee of Bernard L. Madoff Investment Securities (BLMIS) against a number of parties that failed to properly investigate Madoff's massive Ponzi scheme (Irving H. Picard v. JPMorgan Chase & Co., et al., No. 13-448, U.S. Sup.; See January 2014, Page 5).
- 2nd Circuit Panel Denies Rehearing In Madoff Feeder Fund Lawsuit
NEW YORK - Finding the U.S. Supreme Court's ruling in Chadbourne & Park LLP v. Troice to confirm both the "logic and holding" of a Second Circuit U.S. Court of Appeals' ruling in an Bernard L. Madoff Investment Securities LLC (Madoff Securities) feeder fund lawsuit, a Second Circuit panel on May 28 declined to granted investors' motions for rehearing and rehearing en banc (In re: Herald, Primeo and Thema, Nos. 12-156 and 12-162, 2nd Cir.).
- High Court Declines Review Of Rajaratnam Insider Trading Conviction
WASHINGTON, D.C. - The U.S. Supreme Court on June 16 declined to review a Second Circuit U.S. Court of Appeals' ruling upholding the conviction of hedge fund founder Raj Rajaratnam on claims that he violated federal securities law for his role in a massive insider trading scheme (Raj Rajaratnam v. United States of America, No. 13-1001, U.S. Sup.; See May 2014, Page 22).
- Panel: District Court Did Not Err In Dismissing Debt Collection Lawsuit
DENVER - A federal district court did not err in dismissing a consumer's Fair Debt Collection Practices Act (FDCPA) lawsuit because the consumer failed to show that "lawful actions to collect judgment were within the reach of the statute," a 10th Circuit U.S. Court of Appeals panel ruled June 6 (James T. Davis v. Nebraska Furniture Mart Inc., et al., No. 13-3214, 10th Cir.; 2014 U.S. App. LEXIS 10546).
- Judge: Debt Collector's Letter To Consumer Was Not Misleading, Deceptive
BROOKLYN, N.Y. - A debt collector's letter to a consumer seeking to settle a debt did not violate provisions of the Fair Debt Collection Practices Act (FDCPA) because its reference to "savings" that would result from the offered settlement was not misleading or deceptive, a federal judge in New York ruled June 11 (Isaac Altman v. J.C. Christensen & Associates Inc., No. 13-6502, E.D. N.Y.; 2014 U.S. Dist. LEXIS 79621).
- Judge Trims Claims Against Successor Trustee In Mortgage Loan Suit
ST. LOUIS - A federal judge in Missouri on June 13 granted in part and denied in part a motion to dismiss filed by a successor trustee in a lawsuit regarding the allegedly improper foreclosure on real property, ruling that although consumers adequately pleaded their Fair Debt Collection Practices Act (FDCPA), they have failed to plead claims under the Real Estate Settlement Procedures Act and a claim for negligence (John Stricklin v. Litton Loan Servicing L.P., et al., No. 13-1354, E.D. Mo.; 2014 U.S. Dist. LEXIS 80670).
- Magistrate Judge: Consumer Failed To State Claim Against Debt Collector
FRESNO, Calif. - A federal magistrate judge in California on June 16 dismissed a consumer's Fair Debt Collection Practices Act (FDPCA) complaint against a debt collector, ruling that the consumer failed to properly state a claim for relief (Evelyn Chavez v. Access Capital Services Inc., No. 13-1037, E.D. Calif.; 2014 U.S. Dist. LEXIS 81626).
- Judge: Consumer's Debt Collection Law Claims Time-Barred
OCALA, Fla. - Dismissal of a consumer's state and federal debt collection law claims is warranted because they are time-barred under the statute of limitations, a Florida federal judge ruled June 11 (Gregory M. Crossman v. Asset Acceptance LLC, No. 14-115, M.D. Fla.; 2014 U.S. Dist. LEXIS 79529).
- Bank's Debt Collection Calls Without Proper Consent Violated Act, Panel Rules
ATLANTA - A federal district court did not err in granting partial summary judgment in a Telephone Consumer Protection Act (TCPA) lawsuit against Wells Fargo Bank N.A. because the bank violated provisions of the act when it contacted a consumer to collect on a debt using an autodialing system without the consent of the "called party," an 11th Circuit U.S. Court of Appeals panel ruled in a June 5 opinion (Lynn Breslow v. Wells Fargo Bank N.A., doing business as Wachovia Bank N.A., No. 12-14565, 11th Cir.; 2014 U.S. App. LEXIS 10457).
- 11th Circuit: Federal Law Preempts Check- Fees Class Action
ATLANTA - Federal law preempts claims that Regions Bank violated state law by charging out-of-state check-cashing fees, the 11th Circuit U.S. Court of Appeals ruled May 30, affirming a federal court's dismissal of a putative class action (Derek Pereira, et al. v. Regions Bank, No. 13-10458, 11th Cir.; 2014 U.S. App. LEXIS 10040).
- 11th Circuit Upholds Ponzi Ruling, Reverses Interest Decision
ATLANTA - The 11th Circuit U.S. Court of Appeals on June 2 affirmed a federal court's award of nearly $1 million to the receiver of hedge funds operated as a Ponzi scheme by Arthur Nadel but reversed its denial of prejudgment interest, finding that a magistrate judge abused his discretion in making the recommendation (Burton Wiand v. Vernon Lee, et al., No. 13-10448, 11th Cir.; 2014 U.S. App. LEXIS 10154)
- Ernst & Young To Settle Claims With Investors In Lehman Brothers Suit
NEW YORK - Independent outside auditor Ernst & Young LLP (E&Y) has agreed to settle claims that it violated federal securities law by misrepresenting the business and financial condition at Lehman Brothers Holdings Inc., according to court documents filed May 1 in New York federal court (In re Lehman Brothers Securities & ERISA Litigation, No. 09-md-2017; $(California Public Employees Retirement System v. Richard S. Fuld Jr., et al., No. 11-1281$) S.D. N.Y.).
- Customer's Claims Against Bitcoin Miner Manufacturer Are Plausible, Judge Finds
KANSAS CITY, Kan. - A Kansas federal judge on June 6 mostly denied a motion to dismiss by a maker of bitcoin miners, finding that a customer had sufficiently alleged fraud, negligent misrepresentation and consumer protection violations to survive dismissal (Martin Meissner v. BF Labs Inc., No. 2:13-cv-02617, D. Kan.; 2014 U.S. Dist. LEXIS 77135).
- Judge Dismisses Fair Credit Reporting Act Claims Against Credit Ratings Agencies
HONOLULU - A federal judge in Hawaii on June 16 dismissed an amended complaint filed by consumers who alleged that a credit card company and credit ratings agencies violated provisions of the Fair Credit Reporting Act (FCRA) by failing to correct their credit reports to show that timely payments had been made on a credit card, ruling that the consumers failed to state a claim against certain defendants (Norman Katz, et al. v. American Express Co., et al., No. 14-0084, D. Hawaii; 2014 U.S. Dist. LEXIS 82204).
- Federal Judge Dismisses Suit Against EBay Lending Program
SALT LAKE CITY - A federal judge in Utah on May 23 granted eBay Inc. and PayPal Inc. affiliate Bill Me Later's (BML) motion to dismiss a putative class action in which a consumer alleges that the interest rates charged to him on a computer purchase were illegal, finding that he inadequately attempted to identify BML as the true lender or real party in interest (Kyle Sawyer v. Bill Me Later, et al., No. 11-0988, D. Utah; 2014 U.S. Dist. LEXIS 71261).
- Texas Panel Upholds Dismissal Of Challenge To Lending Ordinance
DALLAS - A Texas appeals court on May 23 rejected payday lending companies' challenge to restrictions the City of Dallas placed on credit access businesses' (CABs) short-term loans, finding that a trial court did not err in holding that it did not have equity jurisdiction or subject matter jurisdiction over the claims (Consumer Service Alliance of Texas Inc., et al. v. City of Dallas, Texas, No. 05-13-00255, Texas App., 5th Dist.).
- Federal Judge Dismisses Credit-Reporting Suit Arising From Scam
SAN FRANCISCO - A California federal judge on May 29 dismissed a suit alleging that credit reporting agency DataX Ltd. provided reports to scam operators, finding that a consumer has not shown that the agency furnished a report about him to anyone connected to the scam (David Karrigan v. DataX Ltd., et al., No. 13-2995, N.D. Calif.; 2014 U.S. Dist. LEXIS 74094).
- Delaware Supreme Court Rejects Suit Arising From Washington Mutual Bankruptcy
WILMINGTON, Del. - The Delaware Supreme Court on May 28 found that a suit the Washington Mutual Inc. (WMI) liquidating trust filed seeking coverage from directors and officers insurers is not yet ripe for adjudication and reversed a lower court's ruling (XL Specialty Insurance Co., et al. v. WMI Liquidating Trust, No. 499, 2013, Del. Sup.; 2014 Del. LEXIS 230).
- Claimants Didn't Exhaust FDIC Remedies, Federal Judge Rules
SAN ANTONIO - A federal judge in Texas on June 11 dismissed a suit alleging breach of contract and other claims against the failed First National Bank,as the manager of an apartment complex, finding that the plaintiffs' failure to file a claim with the Federal Deposit Insurance Corp. bars the court's jurisdiction over the case (Jimmy Mack, et al. v. First National Bank, et al., No. 13-1104, W.D. Texas; 2014 U.S. Dist. LEXIS 79583).
- Federal Judge Dismisses Landlord's Suit Against Failed Frontier Bank
OPELIKA, Ala. - A federal judge in Alabama on June 13 dismissed a landlord's complaint alleging that he did not receive rent payments from a tenant in a building mortgaged to the failed Frontier Bank but denied the Federal Deposit Insurance Corp.'s motion to pay interpleaded funds (Wayne Ray v. Federal Deposit Insurance Corp., et al., No. 13-0375, M.D. Ala.; 2014 U.S. Dist. LEXIS 81465).
- Federal Judge Certifies Class Of Consumers In ATM Fees Action
ST. PAUL, Minn. - A federal judge in Minnesota on June 10 certified a class of plaintiffs in a suit in which an ATM operator is alleged to have violated the Electronic Fund Transfer Act (EFTA) by not placing a prominent fee notice on its machine and denied the operator's motion to dismiss, finding that the pre-amendment version of the EFTA applies to the plaintiffs' claim (Margaret Gawarecki, et al. v. ATM Network Inc., No. 11-1923, D. Minn.; 2014 U.S. Dist. LEXIS 78735).
- Texas Panel Denies Insurer's Motion To Rehear $16M Bank Theft Coverage Suit
HOUSTON - A Texas appeals panel on June 12 denied an insurer's motion to reconsider its March 11 ruling that an ATM operator suffered a covered loss under its insurance policy when an armored truck company stole $16 million (Certain Underwriters at Lloyd's of London subscribing to policy number: FINFR0901509 v. Cardtronics Inc., No. 13-0165, Texas App., 1st Dist.; 2014 Tex. App. LEXIS 6398).