Financial Services Blog

What Last Year’s Data Privacy Rulings May Hold For Future Consumer Class Action Lawsuits – Some Predictions for Financial Institutions

Frost Brown Todd has an active practice of experienced lawyers who regularly counsel clients on all aspect of class action defense and prosecution.   After analyzing recent case law developments in the class action world, some interesting observations and predictions are offered in the Class Action Section’s Class Counsel Blog Year-in-Review. Read More ›

Key Points for Bankers Concerning Federal Income Tax Filing Requirements When Discharging a Debt

As the 2015 tax filing season begins, it is important that individuals and businesses understand their reporting and filing obligations under the federal income tax laws.  In certain situations where a financial institution discharges a debt, a Form 1099-C, Cancellation of Debt, must be filed with the Internal Revenue Service on or before February 28, 2015 (March 31, 2015 if electronically filed).  Generally, for debt that was discharged during 2014, a creditor must file a Form 1099-C when the following three conditions are met: (1) the debt discharged was $600 or more; (2) the creditor is an applicable entity; and (3) an identifiable event has occurred. Read More ›

WEST VIRGINIA SUPREME COURT DISMISSES M.E.R.S. RECORDING FEE PUTATIVE

In State ex rel. U.S. Bank National Association v.  McGraw, Frost Brown Todd recently assisted in obtaining a dismissal, with prejudice, of a putative class action filed by Wyoming County, West Virginia claiming that the use of the private corporation, Mortgage Electronic Registration Systems, Inc., commonly known as “MERS”, as the designee for assignments of deeds of trust in West Virginia violates state law and unjustly enriched the trustees of various mortgage backed security trusts. Wyoming County asserted that the use of MERS (1) undermines the integrity of the counties’ real property records, to the detriment of an open and vibrant real estate market, (2) fails to provide transferees in the MERS registry with adequate perfection of the debts secured by the trust deeds, (3) deprives the counties of revenue, and (4) unjustly enriches the trustees through the nonpayment of recording fees. Read More ›

What Financial Institutions Need To Know About IRS Form 1042-S

IRS Form 1042-S is a tax form for foreign individuals reporting income from a United States based source.  Recent federal law requires that all United States financial institutions file a Form 1042-S for foreign customers earning interest on their United States accounts.  The filing of Form 1042-S by financial institutions is not discretionary, and the failure to tender the form when required may face a compliance penalty.  The purpose of the form is to report interest earned on the non-resident alien fiduciary or foreign corporation’s account with the financial institution.    Read More ›

When Contract Boilerplate Matters: A Case Lesson From the Credit Card Processing World

Those practicing in the payments space know that recorded judicial decisions are few and far between concerning disputes over credit card processing contracts.  Terms and conditions in these contracts are often created with heavy reliance on general contract principles, even though the operative acts of the parties are highly unique and subject to extensive third-party rules.  The January 15, 2015 decision in Schnuck Markets v. First Data Merchant Data Services Corp. and Citicorp Payment Services, U.S.D.C. E.D. Missouri, No. 4:13-CV-2226-JAR, is one of those rare cases, and is a decision highlighting the importance of careful contract drafting in the context of the merchant processing relationship. Read More ›

Supreme Court Clarifies Borrower’s Rescission Rights Under the Truth in Lending Act

On January 13, 2015, the U.S. Supreme Court unanimously decided that a borrower may simply provide written notice to a lender to exercise its right to rescind under the Truth in Lending Act (“TILA”). It need not have actually filed suit within the statutory three year period.  The Court’s decision in Jesinoski v. Countrywide Home Loans, Inc. clarified borrowers’ rescission right under TILA and resolved a split between Circuits.  Read More ›

Financial Institutions are Foreseeable Victims in Target Data Breach Cases

In an important decision regarding financial institution claims for recovery of losses resulting from data breaches, the United States District Court in Minnesota recently issued an Order denying Target’s attempt to dismiss all claims brought against it by financial institutions. Read More ›

New Savings Options Authorized for Retail Customers

Towards the end of 2014, two new national savings laws were signed by President Barack Obama.  The first is American Savings Act, H.R. 3374.  To encourage consumer savings, this Act permits financial institutions to offer prize-linked savings products.  Citing the need to improve the country’s saving rate by American households, and following the success the State of Michigan saw with its own similar program, the Act permits a saving promotion raffle to be offered by insured financial institutions, including federal savings and loan institutions.  A permitted savings promotion raffle is a contest in which the consideration for entry is obtained by the deposit of a specified amount of money into a savings account or other savings program offered by a financial institution. Read More ›

Remote Deposit Capture Technology- Changing Liability for Double Presentment?

The Board of Governors of the Federal Reserve System (“Board”) is proposing important changes to Regulation CC, 12 C.F.R. § 229, which implements the Expedited Funds Availability Act of 1987 (“EFA Act”) and the Check Clearing for the 21st Century Act of 2003 (“Check 21 Act”).  See Availability of Funds and Collection of Checks, 79 Fed. Reg. 6674-01 (proposed Feb. 14, 2014) (to be codified 12 C.F.R. § 229).  The Board’s proposal includes a revised regulatory framework for subpart C of Regulation CC, dealing with the forward collection and return of checks.  In particular, the Board’s proposal would amend 12 C.F.R. § 229.34 to provide new indemnity provisions relating to remote deposit capture services. Read More ›

TD Bank’s Settlement Agreement Provides Insight on State Privacy Concerns

TD Bank recently agreed to pay $850,000 as part of a multi-state settlement agreement with state attorneys from Connecticut, Florida, Maine, Maryland, North Carolina, New Jersey, New York, Pennsylvania, and Vermont. While the assurances in the settlement agreement only bind TD Bank, other companies with electronic records containing consumers’ personal information can benefit from this agreement by interpreting its requirements as minimum standards for their internal security policies and procedures. Read More ›

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Attorney Spotlight

Jared M. Tully Jared Tully has extensive experience defending financial institutions in litigation involving claims of predatory lending and violation of the West Virginia Consumer Credit Protection Act and the Federal Fair Debt Collection Practices Act. Jared is also experienced in defending financial institutions in class action suits as well as defending insurance companies against claims of bad faith.

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