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Posts published in “Banking”

7th Cir. Rejects Defrauded Bank’s Effort to Recover Counterfeit Check Proceeds from Payee’s Bank, Payee, Federal Reserve

The U.S. Court of Appeals for the Seventh Circuit recently held that a bank that honored a counterfeit check was not entitled to reimbursement from the party who deposited the check, nor from the depositing party’s bank or the Federal Reserve. A copy of the…

11th Cir. Holds Bank’s Failure to Stop Theft of Deposit Funds Could Constitute ‘Aiding and Abetting’

The U.S. Court of Appeals for the Eleventh Circuit recently held that a noncustomer pleaded sufficient facts to bring state law negligence and fraud causes of action against a bank when a bank customer engaged in the fraud. In so ruling, the Court held that…

CD Calif. Holds Non-Bank Not ‘True Lender’ on Allegedly Usurious Loans Extended in Name of Bank

The U.S. District Court of the Central District of California recently dismissed a borrower's putative class action complaint against a non-bank that supposedly was the "true lender" for allegedly usurious student loans that were extended in the name of a bank.

2nd Cir. Denies Arbitration Due to Specific Agreement as to Arbitration Forum No Longer Available

The U.S. Court of Appeals for the Second Circuit recently confirmed that, in the Second Circuit, an arbitration agreement is no longer binding where the intent of the parties was to arbitrate with only a specific arbitrator and that arbitrator is unavailable. A copy of…

Illinois App. Court (2nd Dist) Holds Successive Actions on Same Guaranty Not Barred by Res Judicata

The Appellate Court of Illinois, Second District, recently rejected the arguments of two loan guarantors that a bank’s current claims against them were barred by res judicata because the current claims arose out of the same guaranty that the bank used to sue them in…

SCOTUS Denies Cert in 2nd Cir. Case Holding Debt Collector Could Not Charge Usurious Fees, Interest Allowed for Bank Originator

As you may recall from our prior updates, the U.S. Court of Appeals for the Second Circuit recently reversed a district court’s ruling that federal National Bank Act preemption applicable to the loan originator allowed a non-bank consumer debt buyer to charge interest in excess…

8th Cir. Holds Cybertheft Covered by Financial Institution Bond Applying ‘Concurrent Causation’ Doctrine

The U.S. Court of Appeals for the Eighth Circuit recently held that a bank was entitled to recover its cybertheft losses under its financial institution bond, despite its employee’s violation of the bank’s internal policies and procedures, and despite the bank’s failure to update its…

5th Cir. Holds Compliance With Calif. Probate Code Makes Bank Immune from Wrongful Disbursement Claim

The U.S. Court of Appeals for the Fifth Circuit recently held that, although a bank had actual notice of an heir’s claim to her decedent father’s account funds, the bank’s compliance with the post-death affidavit provisions of California Probate § 13106(a) rendered the bank immune…

7th Cir. Rejects Breach of Contract Allegations by Borrowers of Failed Bank Against Purchaser Bank

The U.S. Court of Appeals for the Seventh Circuit recently affirmed the dismissal of a breach of contract claim brought by a group of investors against a bank that purchased the assets of a failed bank in receivership, because there was no writing memorializing the…