Header graphic for print
Florida Banking Law Blog Legal developments impacting banking, finance and loan enforcement in Florida

Tag Archives: Banking Operations

Complying with the Florida Consumer Collection Practice Act

Posted in Debt and Judgment Collection

In addition to ensuring compliance with the federal Fair Debt Collection Practices Act (FDCPA), lenders should take precautions to limit its exposure to claims under the Florida Consumer Collection Practices Act (FCCPA).  For example, lenders should:   Ensure that loan accounting systems accurately track the terms of loan modifications, forbearance agreements, and other loan documents… Continue Reading

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

The Equal Credit Opportunity Act’s Safe Harbor for Assignees

Posted in Banking Operations

In a previous post, we considered whether guarantors are considered to be “applicants” under the Equal Credit Opportunity Act (the “ECOA”), and today, we will consider whether assignees who acquire debt would be subject to penalties under the ECOA. The question turns on whether assignees are considered to be “creditors” under the law. The ECOA… Continue Reading

Do Guarantors Fall Under the Protection of the Equal Credit Opportunity Act?

Posted in Banking Operations

We have discussed the Equal Credit Opportunity Act(“ECOA”), which makes it unlawful for a creditor to discriminate against an applicant in any aspect of a credit transaction on the basis of, among other things, the applicant’s marital status, religion, sex, race, or age. The Federal Reserve Board has enacted regulations to implement this law. One… Continue Reading

Florida Consumer Collection Practices Act Applies to Anyone Collecting a Debt

Posted in Banking Operations, Debt and Judgment Collection

The Florida Consumer Collection Practices Act (“FCCPA”) prohibits anyone attempting to collect a debt from using certain types of abusive, deceptive, and misleading tactics.  In a recent decision, Florida’s Second District Court of Appeals ruled that the FCCPA applies not just to “debt collectors” but also to banks that send demand letters to borrowers whose… Continue Reading

Case Update: Authority to Endorse Note and Mortgage IS Self-Authenticating

Posted in Banking Operations, Debt and Judgment Collection

In our August 29, 2013 post, we reported on a shift in the case law regarding the self-authentification of the authority to endorse a note and mortgage. Subsequently, however, the court in Bennett v. Deutsche Bank National Trust Company granted the bank’s motion for rehearing, and summarily reversed its previous decision. In the subsequent opinion… Continue Reading

Authority to Endorse Note and Mortgage Not Self-Authenticating

Posted in Banking Operations, Debt and Judgment Collection

This post is no longer current.  The Third Circuit reversed its opinion in Bennett and held that authority is self-authenticating.  For more on the revised opinion, please see our updated post. Establishing the authority to foreclose a note and mortgage is simple when the note and mortgage are held by the original lender. In today’s… Continue Reading

Enforcing a Lost Promissory Note

Posted in Banking Operations, Commercial Lending, Commercial Real Estate Lending, Debt and Judgment Collection, Dischargeability of Debts, Loan Sales and Syndications, Residential Foreclosure, Residential Real Estate Lending, Special Assets Litigation

In Florida, it is well established that the original promissory note must be surrendered to the court as a condition of its enforcement. What do you do when you cannot find the original promissory note? Florida Statutes 673.3091 sets out a procedure to follow in order to  “reestablish” a lost note and provides that a… Continue Reading

Municipal Liens vs. Mortgages: Florida’s Supreme Court Rules on Superpriority Issue

Posted in Debt and Judgment Collection, Special Assets Litigation

In my April 18th post, I discussed the recent trend of municipalities enacting ordinances designed to give their code enforcement liens “superpriority” over prior-recorded mortgages. Basically, the municipalities have sought to achieve for their liens the same priority as that afforded liens for unpaid real estate taxes. In 2011, the 5th District Court of Appeal… Continue Reading

Municipal Liens vs. Mortgages: Which Has Priority?

Posted in Debt and Judgment Collection, Special Assets Litigation

I have recently encountered several situations in which local governments are claiming, under ordinances they have enacted, that their liens and fines have “superpriority” status over existing mortgages, regardless of when the liens were recorded and whether or not the mortgage holder ever was given notice of the liens. It seems that these claims are… Continue Reading

Transfers of Real Property for Estate Planning and Other Purposes and Their Effect on the Mortgage Lender

Posted in Commercial Real Estate Lending, Residential Real Estate Lending

I receive frequent inquiries from bank clients who are concerned because their mortgage borrower has requested permission to transfer the collateral real property to another entity. These requests commonly are made for estate planning purposes (though other reasons are often cited) and may involve transferring the property to other entities such as a trust. The… 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

Foreclosure Strategies for Second Mortgage Holders

Posted in Debt and Judgment Collection, Special Assets Litigation

Lenders holding second mortgages will, assuming the first mortgage is in default, face decisions as to how to best protect their interests in the property. These questions typically come to the forefront when the first mortgage holder files a foreclosure suit and names the second mortgage holder as a defendant. The bank in second position… 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

Use of FDIC Special Powers: The Expanded Scope of the Term “Agreement”

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 with failed banks. Parties sometimes attempt to get around the special powers hurdle by challenging the breadth… Continue Reading

Use of FDIC Special Powers: Overview

Posted in Special Assets Litigation

Last month, the Federal Deposit Insurance Corporation reported that 470 financial institutions have failed since 2007. It is no wonder, then, that many institutions are embroiled in litigation involving loans made by failed banks and subsequently assigned to them by the FDIC. Borrowers often try to raise defenses against the acquiring institutions based on allegations… Continue Reading

Avoid Potential Lender Liability for Setting Off Against an Account

Posted in Banking Operations, Debt and Judgment Collection

A lender’s ability to set off against a borrower’s account can be a valuable tool for lenders, but care must be exercised to safeguard against potential liability. If setoff is exercised against a checking account, there is a likelihood that checks drawn on the account prior to the setoff (or prior to notice to the… Continue Reading

How Does a Bank’s Claim For Set-Off Fare in the Face of a Garnishment?

Posted in Banking Operations, Debt and Judgment Collection, Special Assets Litigation

In Florida, it is well established that a bank has a common law right of set-off against funds held in a depositor’s account if the depositor has defaulted under a loan from the bank. This allows the bank the option to apply the funds in the depositor’s account as needed to pay the outstanding obligation… Continue Reading