Class actions alleging technical violations of the Fair Credit Reporting Act (FCRA) against employers who obtain consumer reports on job applicants are all the rage, generating large settlements and headlines (at least in legal circles).
The North Carolina Supreme Court recently analyzed whether a loan officer owes a borrower a fiduciary duty in a home mortgage transaction. Dallaire v. Bank of Am., ___N.C.___, 747 S.E.2d 535 (2013), decided June 12, 2014, No. 51PA13. Jacques and Fernande Dallaire (“Borrowers”) purchased a home as their primary residence in 1998. Seven years later they filed Chapter 7 bankruptcy due to unrelated business debts.
A recent decision from the Seventh Circuit reminds creditors, including banks, that the provisions of the Fair Debt Collection Practices Act (the “FDCPA”) may apply to parties other than the debtor. In the case of Todd v. Collecto, Inc., a man brought claims under the FDCPA against a debt collection company that contacted him with respect to a debt owed by the man’s mother.
In prior Alerts we described appellate court decisions addressing challenges to the Missouri common law rule of basing the amount of loan deficiency after real estate foreclosure on the foreclosure price paid, regardless of the fair market value of the affected real property. Challengers have pressed for adoption of a rule that would establish the amount of deficiency as the difference between the unpaid loan obligation and the fair market value of the real property subject to the foreclosure sale. By statute that is the rule in several states, including Kansas.
The case of Simon v. FIA Card, Services, N.A., recently decided by the Third Circuit, demonstrates the potential for conflicts between the Bankruptcy Code and the Fair Debt Collection Practices Act (“FDCPA”) and emphasizes that banks should approach bankruptcy debtors with caution.