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Florida Banking Law Blog

Legal developments impacting banking, finance and loan enforcement in Florida

Welcome to the Florida Banking Law Blog!

Posted in Uncategorized

Rogers Towers, PA welcomes readers to its new Florida Banking Law Blog! A product of the firm’s Banking and Financial Services Practice Group, the blog will serve as a convenient way for us to share our expertise in banking-related legal issues. We represent banks and other providers of financial services in a broad range of matters throughout the state of Florida. As a result of our significant experience, we will have much to share in the upcoming blog posts and we hope that you will find these posts to be informative and beneficial to you in your respective positions in the industry. We appreciate your interest in the field and in Rogers Towers, PA and we look forward to your comments in response to our blog.  Again, welcome to the Florida Banking Law Blog!

Detroit Bankruptcy Update: Settlements and Feasibility

Posted in Bankruptcy, Debt and Judgment Collection

In Detroit’s ongoing restructuring effort, the city cleared a major hurdle last week by settling with its largest adversary, Syncora Guarantee, a New York based bond insurer.  The settlement was negotiated just a week into the bankruptcy trial and was so significant that Judge Steven Rhodes adjourned the trial for two days to allow the parties to work out the logistics of the deal.  Although the Syncora settlement was a huge step in the right direction for the beleaguered municipality, Detroit still faced a vexing requirement of the Chapter 9 process: feasibility.

In addition to being equitable and in the creditors’ best interest, the Chapter 9 plan must be feasible; however, the Bankruptcy Code fails to define feasibility.  On Monday, however, the court appointed financial expert tasked with determining feasibility concluded that the plan was in fact feasible.  In essence the expert found that the city’s exit strategy could actually work and succeed in placing Detroit on a financial course that avoids falling back into bankruptcy.

Although the Syncora settlement and the feasibility determination are monumental steps in Detroit’s emergence from bankruptcy, the city still faces significant roadblocks.  One of the more vocal opponents to the restructuring plan, Financial Guaranty (which stands to lose up to $1.1 billion) has not yet settled with the city, and at a potential recovery rate of only thirteen cents on the dollar, such a settlement appears unlikely.  Nevertheless, the progress made by the city and its creditors since the beginning of the trial suggests that Detroit may in fact emerge from Chapter 9 more smoothly than previously anticipated.

Yet Another New Case On Standing to Foreclose

Posted in Banking Operations

In July, the 2d DCA overturned a bank’s summary judgment on the grounds that the bank failed to rebut the defense of lack of standing.  The frequency and similarity of these cases makes me think of the movie Goundhog Day!

The facts in the July, 2014 case of Olivera v. Bank of America, N.A. are pretty much the same as those of the Lafrance v. US Bank case which I discussed in a prior blog post.  Another bank filed suit and attached to its complaint a copy of a promissory note having no endorsement and then, eighteen months later, filed an original note with the court that contained two undated endorsements.  Not surprisingly, the court held that material disputed facts existed on the issue of standing so summary judgment was not proper.  The lesson, again, is a simple one: make sure before you file the complaint that you have the original note and that it is either payable to the plaintiff or is properly endorsed to the plaintiff, either directly or via a chain of appropriate endorsements.  Endorsements in blank are not necessarily problematic so long as they are present on the subject note prior to the complaint being filed.

Overview of the Florida Consumer Collection Practice Act

Posted in Banking Operations, Debt and Judgment Collection

As discussed in a prior post, the Florida Consumer Collection Practices Act (FCCPA) can apply to both debt collectors (like collection agencies) and lenders who seek to collect their own debts.  The FCCPA is broader than the federal Fair Debt Collections Practices Act (FDCPA), which only regulates the behavior of third-party “debt collectors.”  This is by design, as the Florida legislature intended the state statute to supplement the consumer protections provided by federal law.

 

The FCCPA regulates the debt collection practices of lenders in a variety of ways.  Some of the more significant provisions of the FCCPA include the following:

 

  • When a loan is assigned, the assignee must provide written notice to the debtor of the assignment within 30 days.

 

  • A person may not attempt to enforce a debt which the person knows is not legitimate.  Similarly, a person may not claim some legal right when that person knows that the right does not exist.

 

  • Anyone collecting a debt may not engage in dishonest or harassing debt collection practices.  Practices specifically prohibited include impersonating a law enforcement officer, threatening force or violence, using profane or abusive language, publishing a “deadbeat list”, mailing communication to a debtor on a postcard, or communicating with a debtor’s employer without prior permission or a final court order concerning the debt.

 

  • With some exceptions, a person seeking payment of a debt may not communicate directly with a debtor if the person collecting a debt knows that the debtor is represented by counsel with regard to the matter.

 

The FCCPA provides a civil cause of action for debtors who believe their rights have been violated.  A plaintiff must file a claim within two years of an alleged violation.  If a plaintiff prevails on an FCCPA claim, then a defendant may be required to pay actual damages, statutory damages of up to $1,000.00, and the court costs and attorneys’ fees of the plaintiff.  The fee-shifting provision of the FCCPA normally creates the greatest risk for a lender in contentious litigation.