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Trump May Not be the Only Catalyst for Administrative Reform

March 21, 2017

Authors

Crystal Homa

Trump May Not be the Only Catalyst for Administrative Reform

March 21, 2017

by: Crystal Homa

In the past few months, there has been a lot of speculation regarding the future of many administrative agencies under Trump’s administration. However, two current cases pending in the D.C. Circuit have the potential to have a dramatic impact on administrative agencies and past and present regulatory enforcement actions by such agencies.

In Lucia v. SEC, the SEC brought claims against Lucia for misleading advertising in violation of the Investment Advisers Act of 1940. The enforcement action was initially resolved by an administrative law judge (ALJ); however Luica was later granted a petition for review based on an argument that the administrative hearing was unconstitutional because the ALJ was unconstitutionally appointed. The issue made it up to the U.S. Court of Appeals for the D.C. Circuit who recently held that the ALJ

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CFPB Customer Complaint Data: Seeing What the Plaintiffs’ Bar Sees

February 1, 2017

Authors

Douglas Thompson

CFPB Customer Complaint Data: Seeing What the Plaintiffs’ Bar Sees

February 1, 2017

by: Douglas Thompson

CFPB watchers know that since 2013 customer complaints have been solicited and complaint data has been made available on the CFPB website. January is ubiquitous with New Year’s resolutions (perhaps you’ve already broken all of yours, but hopefully not). It is a great time to review the 2016 customer complaint data and see what the Plaintiffs’ Bar sees about your customers and your institution.

Undoubtedly, in due course, the CFPB has contacted your compliance and legal teams directly about these consumer complaints on an individualized basis. And undoubtedly, you have investigated the issue and provided responsive information to the CFPB and the consumer. Hopefully, each individual customer complaint matter is resolved and closed.

As a class action litigator, however, it is important to highlight that there is more here than

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Reduce Potential ADA Liability by Making ATMs and Websites Accessible

October 25, 2016

Authors

Marcy Bergman and Merrit Jones

Reduce Potential ADA Liability by Making ATMs and Websites Accessible

October 25, 2016

by: Marcy Bergman and Merrit Jones

Banks and credit unions are among the most recent targets of a wave of demand letters and lawsuits alleging violation of the Americans With Disabilities Act of 1990 (the “ADA”). The most common allegations concern inaccessible ATMs and websites, despite the fact that the ADA and its implementing regulations do not yet address website accessibility.

Title III of the ADA prohibits discrimination against individuals “on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages or accommodations of any place of public accommodation,” 42 U.S.C. § 12182(a), which includes banks and credit unions.

In 2010, the federal regulations implementing the ADA were revised, and expressly addressed ATMs for the first time. Banks and credit unions were given until March 2012 to become fully compliant, and most litigation targeted institutions that failed to comply by that date.

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Pointers for Bank Recipients of Demand Letters Asserting ADA Non-Compliance

October 18, 2016

Authors

Dan Wheeler and Jerry Blanchard

Pointers for Bank Recipients of Demand Letters Asserting ADA Non-Compliance

October 18, 2016

by: Dan Wheeler and Jerry Blanchard

Community banks have recently been on the receiving end of demand letters from plaintiffs law firms alleging that the banks’ websites are in violation of the Americans With Disabilities Act of 1990 (the “ADA”).  Interestingly, there are currently no specific federal standards for websites under the ADA. The Department of Justice (“DOJ”) is in the process of developing regulations for website accessibility, but has announced it will not finalize these regulations until 2018 at the earliest. Even so, the DOJ has emphasized that businesses should make websites accessible to the disabled. While the regulations are being developed, many businesses have been applying the Web Content Accessibility Guidelines (WCAG) 2.0 Level AA with the understanding that the DOJ has made clear that it considers a website accessible if it complies with these guidelines.

When a bank receives a demand letter the first thing they need to do is hire counsel to advise them

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Survey of 2015 Georgia Corporate Case Law Developments

March 31, 2016

Authors

Bryan Cave

Survey of 2015 Georgia Corporate Case Law Developments

March 31, 2016

by: Bryan Cave

The annual survey of decisions by state and federal courts during 2015 addressing Georgia corporate and business organization issues is now available.

This survey covers the legal principles governing Georgia businesses, their management and ownership. It catalogs decisions ruling on issues of corporate, limited liability company and partnership law, as well as transactions and litigation issues involving those entities, their governance and investments in them.

In 2015, there were a number of noteworthy decisions spanning a wide variety of corporate and business law issues. There were two significant decisions involving directors of corporations who simultaneously serve as trustees for trusts who hold a minority interest in the corporation – one dealing with liability issues, the other an insurance coverage dispute. Elsewhere, the Georgia Supreme Court issued an important opinion reaffirming the duty to read transactional documents and clarifying the circumstances under which that duty can be excused. The

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Divided Supreme Court Results in Non-Uniform Application of Reg B

March 25, 2016

Authors

Jerry Blanchard

Divided Supreme Court Results in Non-Uniform Application of Reg B

March 25, 2016

by: Jerry Blanchard

In what goes for kicking the can down the road at the Supreme Court, the Court has evenly split on an appeal arising from the Eight Circuit Court of Appeals decision in Hawkins v. Community Bank of Raymore, 761 F3d 937 (CA8 2014) where that court found that the Federal Reserve had overstepped its bounds in adopting rules under the Equal Credit Opportunity Act to protect spousal guarantors. The case arose out of a series of loans in 2005 and 2008 made by the Bank—totaling more than $2,000,000—to PHC Development, LLC to fund the development of a residential subdivision. In connection with each loan and each modification, the principals of the LLC and their spouses (who had no interest in the LLC) executed personal guaranties in favor of Community to secure the loans.

The spouses defended themselves in an action brought by the bank on the basis that Community had

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Georgia Garnishment Statute Held Unconstitutional

September 15, 2015

Authors

Bill Custer, Jerry Blanchard and Jennifer Dempsey

Georgia Garnishment Statute Held Unconstitutional

September 15, 2015

by: Bill Custer, Jerry Blanchard and Jennifer Dempsey

The recent opinion of Judge Marvin Shoob in the Strickland v. Alexander case has created a great deal of confusion among banks about their duties in responding to a summons of garnishment in Georgia.  In that opinion, Judge Shoob declared the Georgia garnishment statute to be unconstitutional on multiple grounds. Primary among the  grounds cited by Judge Shoob was the absence of any notice to the debtor of the existence of statutory exemptions which shield certain funds from garnishment or the procedures available to assert those exemptions.  It is unclear whether the decision will be appealed, modified, or cured by subsequent legislation.  Numerous esoteric questions have been raised by the legal community about the validity of the opinion, but those questions are beyond the scope of this post.

Whether Judge Shoob’s opinion is appealed, modified or cured by the Georgia General Assembly, banks currently face significant questions in its wake.  The

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US Supreme Court to Review ECOA Spousal Guaranty Rules

June 29, 2015

Authors

Jerry Blanchard

US Supreme Court to Review ECOA Spousal Guaranty Rules

June 29, 2015

by: Jerry Blanchard

The US Supreme Court has agreed to review a decision by the Eight Circuit Court of Appeals in Hawkins v. Community Bank of Raymore, 761 F3d 937 (CA8 2014) where the court found that the Federal Reserve  had overstepped its bounds in adopting rules under the Equal Credit Opportunity Act to protect spousal guarantors. The case arose out of a series of loans in 2005 and 2008 made by the Bank—totaling more than $2,000,000—to PHC Development, LLC to fund the development of a residential subdivision. In connection with each loan and each modification, the principals of the LLC and their spouses (who had no interest in the LLC) executed personal guaranties in favor of Community to secure the loans.

In April 2012, Community declared the loans to be in default, accelerated the loans, and demanded payment both from PHC and from the guarantors. The guarantors defended on the basis that

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Lessons Learned in Recent Participation Agreement Litigation

December 22, 2014

Authors

Bill Custer and Jennifer Dempsey

Lessons Learned in Recent Participation Agreement Litigation

December 22, 2014

by: Bill Custer and Jennifer Dempsey

Banks have increasingly used participation agreements over the last several decades to pool loans among multiple lenders—with an originating or lead bank selling a portion of the loan to one or more banks as loan participants.  Loan participations can inure to the benefit of both the lead and participating bank, allowing the banks to pool their resources. Through loan participations, lead banks obtain the opportunity to make larger loans to their customers without the obligation to carry the entire asset on their books, and participant banks obtain the ability to participate in larger loans or in different markets than would otherwise be available to them.

To facilitate a loan participation, the lead and participating banks typically enter into a written participation agreement to govern the relationship and the obligations owed to each other with respect to the loan. While often derived from bank forms that have been widely circulated and

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Should Banks Settle When They are Hit with an M&A Lawsuit?

April 4, 2014

Authors

Jake Bielema and Michael Carey

Should Banks Settle When They are Hit with an M&A Lawsuit?

April 4, 2014

by: Jake Bielema and Michael Carey

In virtually every transaction involving a publicly traded entity these days, a purported shareholder class action challenging the fairness of the merger has become almost inevitable. While these actions ostensibly seek monetary relief, such as an increase in the merger consideration, most of them ultimately settle on terms that call for some additional disclosures to the shareholders in advance of the vote on the transaction, and, of course, an attorneys fee award for the plaintiffs’ lawyers.  There are two primary reasons for these settlements.  First, the risk, however small, of having a large transaction enjoined or otherwise disrupted is often seen as outweighing the relatively minimal nature of the settlement relief.  Second, a settlement is not without its benefits, as, once approved by the Court, the settling defendants can obtain a full and complete release of any claims that were or could have been brought by the shareholders

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