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Florida Banking Law Blog Legal developments impacting banking, finance and loan enforcement in Florida

Scott J. Kennelly

Scott J. Kennelly is a member of Rogers Towers' Litigation Department. His practice is dedicated to representing business entities in complex litigation matters and other disputes in the areas of commercial litigation, business torts and civil trial practice. His focus is on creditor's rights, real property and special assets litigation. Prior to joining Rogers Towers, Mr. Kennelly served as a law clerk to United States Circuit Judge Susan H. Black of the United States Eleventh Court of Appeals. During law school, Mr. Kennelly spent time as an intern with the United States Attorney's Office in Jacksonville.

Posts by Scott J. Kennelly

Usury in Florida: Penalties

Posted in Banking Operations

There are two “tiers” of penalties for violation of the Florida usury statutes, one civil and the other criminal, and both are severe.  Civil penalties usually involve forfeiture of the entire interest charged (or contracted to be charged), such that only the principal balance may be enforced. If a court determines that unlawful usurious interest… Continue Reading

FIRREA Protects Purchasing Banks Against Some Claims Disguised as Affirmative Defenses

Posted in FDIC Related Issues, Special Assets Litigation

As previously discussed on this blog, the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”) creates a mandatory administrative claims process  for claims against the assets of failed financial institutions.  If a party with a claim against a failed bank does not comply with FIRREA’s requirements, then that party is generally barred from later raising… Continue Reading

A Potential Defense for Purchasing Banks Against Lender Liability Claims Based on the Actions of a Failed Bank

Posted in FDIC Related Issues, Special Assets Litigation

Previous posts discussed how the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”) creates a mandatory administrative claims process for claims against the assets of failed financial institutions.  If a party with a claim against a failed bank does not comply with FIRREA, then that party is barred from later bringing that claim in federal… Continue Reading

Jurisdiction After Settlement Agreements

Posted in Debt and Judgment Collection, Special Assets Litigation

In the midst of litigation, the lender and the borrower often reach a settlement and execute a settlement agreement.  Sometimes, the settlement agreement calls for the immediate resolution of the lawsuit, so the lender complies by dismissing the lawsuit.  But what happens if the borrower later breaches the settlement agreement?  The lawsuit was dismissed, so… Continue Reading

Claims Against Failed Banks Must Go Through the FDIC’s Administrative Claims Process

Posted in FDIC Related Issues

As described in a previous post, the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”) requires that anyone with a claim against a failed bank must file a claim with the FDIC within 90 days of being notified (either by mail or by newspaper publication) of the FDIC’s administrative claims process. Claims that must go… Continue Reading

The FDIC’s Administrative Claims Process for Failed Banks

Posted in FDIC Related Issues, Residential Foreclosure, Special Assets Litigation

Enacted by Congress after the Savings and Loan Crisis of the 1980s, the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”) gives the FDIC sweeping authority to resolve the problems posed by a failed financial institution. This authority includes a mandatory administrative claims process to help the FDIC efficiently identify all claims against the receivership… Continue Reading

Question Certified to the Florida Supreme Court: Can Lenders Cure Standing Defects?

Posted in Special Assets Litigation

Establishing standing—the legal basis of a plaintiff’s right to bring suit—to enforce a promissory note is a critical aspect of any foreclosure action. Florida case law requires that the party seeking to foreclose have standing at the time the lawsuit is filed. This can be problematic for lenders who own notes which have been sold… Continue Reading

Discovery of Loss-Share Payments in Litigation: Public Policy

Posted in FDIC Related Issues, Special Assets Litigation

Financial institutions seeking to challenge discovery relating to Loss-Share Agreements and payments from the FDIC should be able to do so on the grounds of relevance, as we previously discussed. A second argument against such discovery is based on the public policy underlying Loss-Share Agreements. Reducing a creditor’s claim based on the amount that it… Continue Reading

FDIC Loss-Share Agreements: Branch Banking & Trust Company v. Kraz, LLC

Posted in FDIC Related Issues, Special Assets Litigation

There is a common misconception among borrowers that the application of Loss-Share Agreements may result in “windfalls” to institutions that acquire assets of failed banks from the FDIC. They reason that the acquiring institution will receive both reimbursement for its losses from the FDIC and recovery from the borrowers.” However, this inaccurately depicts how Loss-Share… Continue Reading

Discovery of Loss-Share Payments in Litigation: Irrelevant

Posted in FDIC Related Issues, Special Assets Litigation

In foreclosure actions based on assets of a failed bank, borrowers sometimes attempt to discover whether and how much the FDIC has reimbursed the acquiring institution for its loss under the loan. In doing so, borrowers hope to claim that their liability for the debt should be set-off by any amount the acquiring institution has… Continue Reading

FDIC Loss-Share Agreements: Overview

Posted in FDIC Related Issues, Special Assets Litigation

Once a bank’s primary regulator has determined to close a bank, the Federal Deposit Insurance Corporation steps in to “resolve” it, usually by accepting appointment as the bank’s receiver. Before being formally appointed, the FDIC has typically engaged in substantial evaluation of the bank’s assets and liabilities and solicited bids from solvent banks or other… Continue Reading

Usury in Florida: Using the 365/360 Method to Calculate Interest

Posted in Banking Operations, Special Assets Litigation

Many lending institutions use the 365/360 method of calculating interest on their loans.  This method involves applying the ratio of the annual interest over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.  Many state and federal courts have held the… Continue Reading

Usury in Florida: The Limited Application of the Savings Clause

Posted in Banking Operations, Special Assets Litigation

A usury savings clause is a provision in a loan document that attempts to negate any other provisions therein that might result in the extraction of an illegal interest rate. Common examples of savings clauses includes the following: Notwithstanding any provisions in this note to the contrary, no interest, charges, or other payments in excess… Continue Reading

Fair Debt Collection Practices Act (FDCPA): Ceasing Communications with a Debtor’s Attorney?

Posted in Debt and Judgment Collection

The Fair Debt Collection Practices Act (FDCPA) gives a debtor the right to notify a debt collector that he or she wishes the debt collector to cease communication with respect to the debt, with some exceptions. In situations where the creditor is communicating with an attorney representing the debtor, the question arises: does that statute… Continue Reading

Usury in Florida; Generally

Posted in Banking Operations

Under Florida law, usury is defined as the willful and knowing charge or receipt of interest in excess of 18% per year for credit transactions involving less than $500,000 or between 25% and 45% per year in a credit transaction involving more than $500,000. The usurious nature of a contract is determined from the date… Continue Reading

Florida Deficiency Proceedings: Establishing the Value of the Property

Posted in Debt and Judgment Collection, Special Assets Litigation

Following a foreclosure sale, a secured creditor may seek a monetary judgment for the deficiency amount that remains owed to it by the borrower. If the creditor was the successful bidder at the foreclosure sale, it has the burden of proving that the fair market value of the property foreclosed upon, as of the date… Continue Reading

Florida Deficiency Proceedings: Effect of Bids at the Foreclosure Sale

Posted in Debt and Judgment Collection, Special Assets Litigation

During a deficiency proceeding, once a creditor introduces the foreclosure sale price, the borrower technically has the burden of presenting evidence to establish the fair market value of the property. In the absence of such evidence, the trial court has the power to act upon the assumption that the sale price reflects the fair market… Continue Reading

Use of FDIC Special Powers: Knowledge by the FDIC or its Assignees is Irrelevant

Posted in Special Assets Litigation

In previous posts, we introduced the protections afforded the FDIC by the D’Oench Doctrine and 12 U.S.C. § 1823(e), which bar claims and defenses against the FDIC and its assignees by private parties based on improperly documented  “agreements” (the term has been interpreted broadly) with failed banks. The policy underlying this bar is to prevent such… Continue Reading