| In this 2021 year-end summary, the Financial Services Law Blog analyzes several of the most impactful financial services decisions and regulatory developments at both the national and local state level.
| After it granted review six months ago, The U.S. Supreme Court has reversed the Ninth Circuit's $40 million judgment in favor of plaintiffs in a FCRA class action case, holding that thousands of the class members had no standing for their claims.
| A year after its 2020 Opinion declaring the single-director, terminable only-for-cause structure of the CFPB unconstitutional, the United States Supreme Court has now predictably issued a similar ruling as to the Federal Housing Finance Agency.
| Following a recent decision out of the United States District Court for the District of Kansas, a bill is expected to pass in Kansas that would eliminate a longstanding ban on credit card surcharges.
| The recently-passed Predatory Loan Prevention Act was signed into effect in Illinois last month, and it caps interest rates for consumer loan transactions at 36 percent. The new law was part of a multifaceted economic equity bill signed into effect last month.
| Little about 2020 was normal, and the number of trials in the Kansas City area was no exception. Data released by the Greater Kansas City Jury Verdict Service shows that the total number of jury trials in the Kansas City area was down over 65% in 2020 when compared to 2019.
| The U.S. Supreme Court recently granted certiorari review of a FCRA class action jury verdict out of the Ninth Circuit. The case has enormous implications for class actions where the punitive and statutory damages dwarf any actual injury of the class members.
| In a year full of financial hardship, retail fraud and e-commerce scams threaten to damage both businesses and consumers. So, what are consumers to do if they believe they are the victim of a gift card scam? And what steps can retailers, banks and other financial institutions take to limit potential heartache during the season of giving?
| Missouri Court of Appeals compels arbitration, where the parties agreed to submit threshold issues of arbitrability to a third-party neutral rather than the court.
| The U.S. Supreme Court has Settled the Debate Once and for All: The Single-Director, Terminable Only For-Cause Structure of the CFPB is Unconstitutional.
| The Missouri Court of Appeals held that a plaintiff had standing to sue under the FCRA, where an offer of employment was revoked due to an inaccuracy on his criminal background report.
| In an update to a prior post, Senate Bill 591 (which seeks to impose stricter standards for the application of punitive damages) cleared The Missouri House on May 12, 2020 in a 98-51 vote. The Bill, now on its way to Governor Parson for his signature, will likely go into effect on August 28, 2020. Governor Parson is expected to sign the measure without veto.
| An additional $310 billion in funding for the Paycheck Protection Program was approved by the United States Legislature, and applications resumed this Monday. But many small businesses still have questions about how to use the money, how to qualify for forgiveness, and whether the PPP Loan Program is right for them.
| As we previously reported, last week, Kansas Governor Laura Kelly issued Executive Order 20-06 prohibiting evictions, foreclosures and any related judicial proceedings in the State of Kansas through May 1, 2020. Now, Governor Kelly has issued Executive Order 20-10, which amends and supersedes the previous order and provides additional clarification on certain points
| In response to the COVID-19 pandemic, Kansas Governor Laura Kelly issued Executive Order 20-06 on March 17, 2020, prohibiting evictions, foreclosures and any related judicial proceedings in the State of Kansas through May 1, 2020.
| The movement to challenge the constitutionality of the Consumer Financial Protection Bureau ("CFPB") was given life through the PHH Mortgage case, and then seemingly was left without a pulse after the PHH Mortgage en banc hearing. But in Seila Law, LLC v. CFPB, No. 19-7 (U.S.), the argument that the CFPB's structure is unconstitutional was resurrected, and it has survived all the way to the Supreme Court of the United States.
| The data is out on Kansas City area jury verdicts for calendar year 2019, and it contains mostly good news for defendants. While the total number of jury verdicts was up slightly from 2018, the percentage of those verdicts in plaintiffs' favor was down, with nearly 60% of claims that went to a jury ending in a defense verdict. 2019 also saw a drop of almost 30% in the number of verdicts over $1 million. Although the data shows a rise in the average verdict amount, that increase is entirely attributable to a single mega verdict of more than $100 million; controlling for that outlier, the size of the average award was also down significantly.
| The U.S. Supreme Court holds that a third-party defendant is not entitled to remove because neither the General Removal Statute nor the Class Action Fairness Act permits a third-party counterclaim defendant to do so.
| SECOND UPDATE: Missouri Governor Mike Parson signs Senate Bill 7, which amends venue and joinder laws, to prevent out of state plaintiffs from litigating their cases in an inappropriate venue.
| UPDATE: House Passes Senate Bill 7, in which the Missouri legislature seeks to amend venue and joinder laws, to prevent out of state plaintiffs from litigating their cases in an inappropriate venue.
| The Illinois Appellate Court, First District, held that a party may timely withdraw a previously disclosed testifying expert and redesignate said expert as a Rule 201(b)(3) consultant entitled to the consultant's privilege against disclosure absent exceptional circumstances.
| In Senate Bill 7, the Missouri legislature seeks to amend venue and joinder laws, to prevent out of state plaintiffs from litigating their cases in an inappropriate venue.
| Defense attorneys beware. The 2018-2019 American Tort Reform Foundation's (ATRF) Judicial Hellholes Report is out, and the City of St. Louis landed fourth on this list because of its massive verdicts, forum shopping, and legislative failures.
| In a blow to the enforceability of arbitration clauses found in many existing consumer contracts, the Missouri Supreme Court declines to appoint a substitute arbitration provider after the agreed-upon arbitration forum's "sudden and unforeseen departure" from the scene.
| For those wondering if Director Cordray’s retirement would truly bring about as much change as anticipated, the CFPB’s first actions in 2018, under the leadership of acting director Mick Mulvaney, have demonstrated a stark change in philosophy from the days of Cordray.
| Its appeal is undeniable. Users can transfer funds internationally, anonymously, and efficiently. Its value has continued to grow faster than anyone ever expected. But the pressure to regulate Bitcoin is coming to a head, as regulators and financial institutions grow increasingly concerned of the potential for criminal activity and financial instability. 2018 may ring in the first substantial efforts in the U.S. for oversight of this controversial cryptocurrency.
| Following the issuance of the CFPB’s Rule prohibiting arbitration clauses for waiver of consumer class action rights, the U.S. Senate wasted no time in passing legislation to overturn the CFPB rule. The law passed by the Senate restores law regarding arbitration provisions to the status quo.
| Predictably, upon Equifax’ announcement earlier this month concerning an unprecedented data breach and apparent failure to timely to disclose that breach, Equifax is already facing class action litigation and the impending threat of actions to follow from state attorneys general
| After conducting a study, which spanned several years, on the prevalence of mandatory arbitration clauses in consumer financial products, the CFPB has issues a new rule that will prohibit financial institutions from including mandatory arbitration clauses that prohibit a consumer from joining in class action litigation against the bank.
| Martin Sigillito, the former St. Louis Attorney who was convicted in 2011 for his involvement in a $52 million Ponzi scheme, is 7 years into a 47-year federal sentence, but the Eight Circuit for a second time just decided that many of his investors cannot recoup their losses from a bank where Sigillito kept the accounts he used to defraud them.
| A unanimous Supreme Court upheld the Fourth Circuit's holding in Henson v. Santander Consumer USA Inc., in which the Circuit Court held that, although Santander was the purchaser of a debt that was in default, it was not a "debt collector" under the FDCPA, and thus, was not subject to its stringent requirements for collection activities.
| The Financial Choice Act was introduced in 2016, and its revamped successor, referred to as “CHOICE Act 2.0,” was reported to the House of Representatives for consideration in early May. Today, the House passed the bill, bringing the United States one step closer to substantial financial regulation reform.
| The United States Supreme Court ruled on May 22, 2017, that the Hague Convention, on the service of judicial documents abroad, permits service by mail if the receiving country has not objected to service by mail and service by mail is authorized under otherwise-applicable law.
| A federal judge in North Carolina agreed with Bayer that federal law preempts all of plaintiff's claims against Bayer in a medical device case. The judge then declined to exercise supplemental jurisdiction over the medical malpractice claims against the healthcare providers and dismissed those claims as well.
| The Missouri Court of Appeals for the Western District promptly affirmed the trial court’s holding that a local bank’s overdraft fee was not “interest,” and, therefore, was not subject to the state’s usury cap.
| Standing in a foreclosure case requires possession of an enforceable note at the time the foreclosure is filed. A mortgage and note may be later reunited and be enforceable.
| Often overlooked by legislators are the detrimental consequences of broad sweeping banking regulations on smaller community banks. At a recent convention, ICBA President Camden R. Fine called for continued efforts by community banks to fight for practical regulation reform.
| Earlier this week, Governor Eric Greitens signed Missouri HB 153 into law. HB 153, which supplants Missouri's existing expert witness standard with that set forth in Federal Rules of Evidence 702, 703, 704 and 705, effectively submits expert testimony in most civil and criminal case to the analysis set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993).
| Within a two-week period, two federal judges issued strongly worded orders denouncing the common practice of asserting boilerplate objections to written discovery.
| The CFPB recently filed its complaint against Navient, the nation’s largest servicer of federal and private student loans for alleged failures in servicing those loans. Filed in the United States District Court for the Middle District of Pennsylvania, the Complaint contains allegations that Navient violated the Consumer Financial Protection Act, the Fair Credit Reporting Act, and the FDPCA and seeks millions in restitution.
| In a ruling favorable to home loan mortgage servicers, the Florida Supreme Court held that the trial court’s dismissal of a previous foreclosure action caused the loan to decelerate, thus recommencing the 5-year statute of limitations period for acceleration of the loan.
| While the very concept of an electronic mortgage is not new, the adoption of e-mortgages as the new "normal" remains a hot topic in the mortgage servicing realm. Despite the technology behind electronic document execution, delays in e-notarization laws prevent e-mortgages from fully replacing traditional home loan transactions.
| On October 25, 2016, FinCEN issued an Advisory outlining recommendations and requirements for financial institutions to report suspicious activity in compliance with the Bank Secrecy Act, clarifying these institutions' obligation to report cyber-events, even where no financial transaction was completed.
| In a long-awaited opinion, the D.C. Circuit Court held that the structure of the CFPB, as it exists currently, is unconstitutional. The Court also rejected the Director’s argument that the applicable statute of limitations does not apply to a CFPB administrative action.
| The results of the November 8, 2016 election have unmistakably cast doubt on the future of the CFPB, particularly as it exists today. With Donald Trump as President-elect, along with a Republican-held House and Senate, it is likely that some of the preceding years’ regulations and consumer protections will be undone.
| A Missouri plaintiff did not irrevocably waive the protections of the work product doctrine simply by designating an expert witness and then withdrawing the designation without disclosing the expert’s analysis or conclusions.
| In its first 4-4 decision since the death of Justice Antonin Scalia, the United States Supreme Court issued a ruling that resulted in affirmation of the 8th Circuit Court of Appeals’ opinion in favor of a Missouri bank in a dispute concerning the Equal Credit Opportunity Act.
| The Kansas Court of Appeals recently held that, even where a debt collector delayed its motion to compel arbitration until 2 years after the litigation was commenced, the trial court did not have the authority to decide that the delay was, in effect, a waiver of arbitration.
| In its current state, the MMPA has allowed consumers to collect substantial verdicts in cases that have strayed from the original intent of lawmakers. SB793 hopes to restore a balance that requires not only that businesses act fairly, but also that consumers act reasonably.
| While a Kansas court may grant relief from a final judgment based on excusable neglect, it is an abuse of discretion to grant that relief when the party seeking that relief has failed either to explain what facts constituted excusable neglect or to provide any evidence to support that claim.
| An agent may recover attorney's fees when enforcing a principal's contract if: the agent is granted the express authority to enforce the contract in the contract itself, the contract contains an attorney's fees provision, and the agent is the prevailing party.
| In two cases involving consumer loans, the Court reaches opposite conclusions as to whether conduct occurring after the initial loan was issued fell with the coverage of the MMPA.
| Experts are not required to rule out all possible causes when performing the differential etiology analysis if the experts have properly ruled in the alleged cause.
| A Kansas plaintiff may amend their pleadings to assert punitive damages up until the day of the pretrial conference.
| Based on its adoption of a statutory scheme of comparative negligence, Kansas has abolished common law assumption of the risk as a bar to recovery. Simmons v. Porter, 298 Kan. 299, 312 P3d 345, 355 (Kan. 2013).
| The plaintiff has the burden of proving standing, which is a jurisdictional issue that can be raised at any time.
| In Kansas, the parties bind themselves to an enforceable settlement, even though the parties contemplate subsequent execution of a formal instrument. However, when the parties specifically condition a contract on it being reduced to writing and signed, there is no enforceable contract until such act is accomplished.