Bank Law Monitor

A Legal Blog for the Financial Services Industry

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It turns out that even lawyers sometimes have to pay their debts. In a recent Washington appellate case, a bank successfully sued an attorney to recover on a loan made to his law firm. Typically the owner of a law firm wouldn’t be held responsible for the corporate debts of a firm (except under a separate personal guaranty). But after the firm ceased operations, the lawyer continued to operate the firm in a manner…
Negotiating the terms of a core processing contract makes haggling over a used car seem like child’s play. For most banks, the reality is stark—you might get some wiggle room on price if you’re willing commit to a longer term. You might also get a few changes on issues that “really matter.” But with only a few major core providers to choose from, these providers tend to think they hold most of the cards and…
What do financial institutions, restaurants, and clothing stores have in common? They’re the most recent targets of demand letters from plaintiffs’ law firms threatening lawsuits because the institution’s website supposedly violates the Americans with Disabilities Act (ADA). These law firms then offer to improve the accessibility of the institution’s website for a hefty fee. They call it “consulting services;” some banks and credit unions see it differently – calling it extortion and fighting back. The…
Last month, the CFPB issued a Request for Information (“Request”) to identify potential ways to increase credit access for underserved segments of the population. In particular, the CFPB noted that certain groups of individuals lack enough credit history to obtain a reliable credit score. While the CFPB’s Request was primarily directed at the financial services industry, the Request also sought input and comments from all interested members of the public. Generally speaking, an individual’s credit…
Update (2/16/17):  The U.S. Court of Appeals for the District of Columbia granted the CFPB’s request to reconsider its earlier ruling with respect to the President’s ability to remove the Director of the CFPB. This ruling provides a glimmer of hope for the continuity of the CFPB’s leadership. Oral argument is set for May 24, 2017. Ever since its inception as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Consumer Financial…
To date, eight states and the District of Columbia have legalized recreational marijuana. As you might expect, there are countless key players and businesses involved in the marijuana supply chain, including producers, processors, transporters, retailers, and in some jurisdictions, distributors. In Washington State alone, total sales since the state’s legalization of recreational marijuana have exceeded $1.5 billion. Generally speaking, the financial services industry has expressed mixed feelings about offering financial services to marijuana businesses.…
Last October in Whatcom County v. Hirst, the Washington Supreme Court held that each county must ensure that there is an adequate water supply before it approves a project permit. The Hirst decision upset the existing process by which a county would assume an adequate water supply, including for projects served by “permit exempt wells,” so long as the Department of Ecology had not closed the area in which the project is located to all…
In the wild west of fintech, state banking regulators have been called to act as the keepers of the peace and the primary enforcers of the law. That is, until the Office of the Comptroller of Currency (OCC) offered to become the new sheriff in town. The OCC unveiled its plan in December to offer special purpose national bank charters to fintech companies. The OCC argues its intervention is necessary to promote innovation that would…
A trustee is not a “debt collector,” so foreclosing a deed of trust is not subject to FDCPA’s restrictions or damages. A federal appellate court held recently that the trustee of a residential deed of trust was not a “debt collector” under the federal Fair Debt Collection Practices Act (FDCPA), because the trustee was enforcing a security interest against the loan’s collateral, not collecting money from the borrower. Ho v. ReconTrust Co., N.A., 840…
Washington has adopted the Washington Uniform Power of Attorney Act (“The Act”) which becomes effective on January 1, 2017 (ESSB 5635). The Act completely replaces Washington’s current law and has some key differences that need to be considered when a bank accepts a power of attorney. The Act applies to all powers of attorney including those executed prior to the effective date but does not include powers of attorney for health care. The following are…