Topline Q2 2015

General information

Filed an amicus brief in the U.S. Supreme Court in a case that may decide whether a plaintiff has standing to sue merely by alleging a breach of a statute even if the plaintiff cannot allege he suffered any injury. Article III of the U.S. Constitution vests courts with authority to adjudicate “cases” or “controversies,” terms that have been interpreted to mean a plaintiff must establish an injury for which he or she seeks redress in order to bring a suit in federal court. The case is Spokeo Inc. v. Robins.  

Filed an amicus brief with the U.S. Second Circuit Court of Appeals in support of review in Madden v. Midland Funding, LLC. In this case a panel of the Second Circuit Court of Appeals disallowed a non-bank assignee of a national bank’s credit card portfolio from enforcing the rules that had applied when the credits were extended by the national bank. We are seeking reconsideration.

Filed an amicus brief with the California Court of Appeal in a case where an arbitration agreement was ruled unenforceable because the account agreement was not referenced exactly by name in the signature card. The case, Cloud v. Farmers & Merchants Bank, potentially has broad ramifications because the bank had followed fairly standard account opening procedures.

Published Regulatory Compliance Bulletins on:

  • A California court held that a bank could be held liable for violating debt collection practices laws by trying to collect a deficiency from a borrower after nonjudicial foreclosure if in doing so the lender implied that the debt is legally enforceable. Here, the creditor was a second lienholder where the proceeds from the first lienholder’s foreclosure sale were insufficient to pay off the second lienholder’s loan.
  • New check standard helps identify remotely created checks (also called demand drafts, preauthorized drafts and telechecks) by assigning the character “6” on the MICR line.

  • New merchant category codes are issued to help compliance with the Unlawful Internet Gambling Enforcement Act of 2006 and Regulation GG by distinguishing certain forms of legal gambling such as lotteries, casinos and horse and dog racing.  

  • Two San Francisco labor ordinances affect banks that come within the definition of “formula retail establishments.” The definition includes financial services providers that have 20 or more establishments worldwide and at least 20 employees in San Francisco. The ordinances protect part-time workers and require advance notice of work schedules and changes.

  • A federal court decision held that a mortgage servicer violated the Truth in Lending Act by failing to credit an online mortgage payment on time and then charging a late fee. The date of submission of an electronic authorization for a payment entered on a servicer’s website is the date of receipt of payment for purposes of TILA and Regulation Z.  

  • A California appeals court held that a bank could be held liable for violating the Coogan Act if it assessed account maintenance fees without first obtaining court approval.  

  • The U.S. Supreme Court decided a case that would make employers liable for intentional discrimination under Title VII of the Civil Rights Act of 1964 based on a job applicant’s religious practice even if its employment policies are neutral on their face and the applicant did not ask for an accommodation. Justice Scalia, writing for an 8-1 majority, wrote, “Title VII gives favored treatment to religious practices, rather than demanding that religious practices be treated no worse than other practices.”  

  • A California court decision affirmed the risk a creditor assumes by taking a lien on a property when the borrower holds something less than a fee simple interest (in this case a life estate) as security. Upon the borrower’s death, her interest terminated and the bank was left unsecured.