Federal Court Rejects PNC Bank’s Bid to Dismiss Consumer Class Action – Case Update

In February of 2020, Westbrook Law PLLC filed a class action complaint against PNC Bank, captioned Polonowski v. PNC Bank, N.A. The complaint alleges that, contrary to specific requirements of the federal Truth in Lending Act (“TILA”), PNC Bank routinely fails to send consumers periodic loan statements if they are going through a bankruptcy, even if the consumers have reaffirmed their mortgage debts to PNC. The complaint alleges that this practice harms consumers by preventing them from receiving notice of interest rate changes, minimum payment amounts, remaining balance, and other critical information.

In May of 2020, PNC filed a motion to dismiss the complaint, arguing that PNC could not be liable for violating TILA because PNC would have “violated federal law” if it had provided periodic loan statements. PNC argued that the automatic stay provided in the bankruptcy code prohibited the sending of any loan statements, even after the plaintiffs’ loan had been reaffirmed and the plaintiffs’ remaining debts had been discharged. On behalf of the plaintiffs, Westbrook Law opposed the motion to dismiss.

The presiding district judge, Hon. Paul L. Maloney, referred PNC’s motion to the magistrate judge for a report and recommendation. The magistrate judge sided with PNC and recommended the court grant the motion to dismiss. The plaintiffs objected and requested that Judge Maloney conduct a fresh review of the motion.

Today, Judge Maloney issued the court’s opinion, rejecting the report and recommendation and denying PNC’s motion dismiss. The court emphasized that once a discharge order has entered in a bankruptcy case, the bankruptcy code does not prohibit the sending of statements regarding a reaffirmed debt. The court further found that the Real Estate Settlement Procedures Act (“RESPA”) could not be narrowed by its implementing regulations (“Regulation X”), and thus the plaintiffs’ secondary claim that PNC unlawfully failed to correct servicing errors brought to its attention was viable and could not be dismissed.

As a result of today’s decision, the case against PNC will move forward. Westbrook Law hopes to hold PNC accountable for habitual violations of TILA, obtain compensation for a class of consumers affected by these practices, and ultimately force PNC and other lenders to provide critical financial information to consumers.

TJW

Fifth Third Bank Opened Fraudulent Accounts – Were You Affected?

Since late 2016, the account fraud scandal at Wells Fargo has been well publicized. Responding to financial incentives put in place at the management level, bank employees created millions of accounts for bank customers without their knowledge or consent, resulting in many instances in the assessment of unearned, fraudulent fees. Wells Fargo has paid hundreds of millions of dollars in fines as a result, and faces a total loss of roughly three billion dollars.

Now, the Consumer Financial Protection Bureau has signaled that Fifth Third Bank may have been involved in a similar scheme of generating fraudulent accounts between 2008 and 2016, in violation of the Truth in Savings Act, Consumer Financial Protection Act, and other laws and regulations.

Westbrook Law PLLC is experienced in bringing class action lawsuits under circumstances in which a repeated practice violates consumer protection laws. If you banked with Fifth Third Bank at any time during the period from 2008 to 2016 and may have had one or more fraudulent accounts opened in your name, please contact us for a consultation.

TJW

Class Action Against Michigan Collection Attorneys and Debt Buyers Reinstated by United States Court of Appeals for the Sixth Circuit

Today the United States Court of Appeals for the Sixth Circuit released its opinion in VanderKodde v. Mary Jane M. Elliott, P.C., a lawsuit brought by Westbrook Law PLLC in 2017 alleging widespread unlawful practices by prominent Michigan collection law firms Mary Jane M. Elliott, P.C. and Berndt & Associates, P.C., along with their clients, large debt buyers Midland Funding, LLC and LVNV Funding, LLC. The lawsuit alleges that the defendants routinely added unlawful and grossly excessive amounts of interest to judgments they obtained against Michigan consumers in state district courts, and that this practice violated the federal Fair Debt Collection Practices Act.

We believe tens of thousands of Michigan consumers have been affected by this practice and that millions of dollars may have been unlawfully collected from them.

At the trial court level, the defendants raised a procedural defense based on the “Rooker-Feldman doctrine,” which disallows federal district courts from acting as appeals courts for state-court judgments. The district court agreed and dismissed the lawsuit. We appealed the dismissal to the Sixth Circuit.

By its opinion today, the Sixth Circuit reversed the dismissal of the lawsuit, effectively reinstating the case and allowing it to proceed. The court emphasized that the plaintiffs in our case were complaining of unlawful conduct of the defendants independent from any state-court judgment: their calculation of judgment interest at an excessive rate and their subsequent attempts to collect excessive debt amounts through garnishments.

The VanderKodde case reflects the importance of class action litigation where thousands of consumers have been harmed by a routine practice by a debt collector or financial institution. While many individual class members may have suffered only small harms, the total amount unlawfully collected by the defendants through this practice may have been enormous. We intend through the VanderKodde lawsuit to pursue justice and compensation for all those harmed.

TJW

New Class Action Lawsuit Against Mortgage Servicer Real Time Resolutions Claims Threats to Harm Credit Ratings Broke the Law

Mortgage loan servicers typically collect and process payments for mortgage loans on behalf of the owners of those loans. If your loan statements come from Ocwen, Nationstar (now using the quizzical alias “Mr. Cooper”), or Seterus, just to name a few, you are dealing with a servicer. Real Time Resolutions, Inc., another servicer, is the latest target of a consumer class-action lawsuit filed by Westbrook Law PLLC in the United States District Court for the Western District of Michigan, Bushouse v. Real Time Resolutions, Inc.

The new lawsuit alleges that Real Time violated federal and state law through its routine practice of threatening consumers with reporting obsolete, negative credit information about them. Whereas the law does not allow credit reporting of most negative items that are past seven years old, 15 U.S.C. § 1691c(a), the complaint alleges that Real Time continues to threaten negative reporting well beyond the seven-year mark. This practice, which could frighten consumers into paying obsolete debts they no longer have any legal obligation to pay, is alleged to violate the Fair Debt Collection Practices Act, 15 U.S.C. § 1692e; the Michigan Occupational Code, M.C.L § 339.915; and the Michigan Mortgage Brokers, Lenders, and Servicers Licensing Act, M.C.L. § 445.1672. The plaintiff seeks damages for herself and other Michigan citizens who received the threatening communications.

Our expertise in credit reporting law–i.e., the federal Fair Credit Reporting Act–and consumer collection law informed this lawsuit and many others on behalf of Michigan consumers. If you have concerns about whether a practice by a debt collector or mortgage servicer is fair or lawful, contact us for a consultation.

TJW