Blockchain and Financial Services Blog

Showing 43 posts in Duties to Customers.

Recent Case Law Focuses on Drafting Considerations in Payments Contracts (part 3 of 3)

A well-crafted contract will be concise, clear, and avoid internal conflicts. In this last article of our three-part series on payments contracts and drafting considerations, a recent case addressing conflicting contractual clauses is discussed. Read More ›

Admit and Legislators Acknowledge That Real Estate Professionals Are Human and Need Protection From Harmless Errors

Ohio and other states where Frost Brown Todd has offices have long had witness and/or notary requirements for the execution of mortgages. Ohio Revised Code Section 5301.01 provides that a “mortgage . . . shall be signed by the . . . mortgagor. . . . The signing shall be acknowledged by the . . . mortgagor . . . before a . . . notary public . . . who shall certify the acknowledgment and subscribe [his or her] name to the certificate of the acknowledgment.” Bankruptcy trustees often try to use their “strong arm” powers[1] to defeat recorded mortgages in order to remove the lien from property of the bankruptcy estate, if the recorded mortgage was defectively executed under state law (in the alternative, the bankruptcy trustee can preserve the lien for the benefit of the bankruptcy estate).

[1]   Bankruptcy trustees so-called strong arm powers include their avoidance powers: the right to avoid competing parties’ interests by acting as if the trustee was a judicial lien creditor, an execution creditor, or a bona fide purchaser. See 11 U.S.C. Section 544. A Chapter 11 Debtor-in-possession can also exercise the strong arm powers. Read More ›

What a Collection Lawyer Should Know About a Client’s Information Management Systems

A collection litigator’s communications with the client include receiving and seeking information. That work is facilitated if counsel has a basic understanding of the lender’s information management systems. Experienced litigators adapt their client communications and court filings to obtain and use the information lender clients can reasonably provide. Understanding the lender’s information management systems also enables counsel to avoid onerous information requests to clients.   Read More ›

What Prepaid Accounts Are Subject to the New Prepaid Rules? What you need to know to be ready.

Prepaid cards are increasingly popular—they are frequently used instead of traditional bank accounts to shop, withdraw cash from ATMs, pay for healthcare costs from health savings accounts, distribute natural disaster aid, and pay wages. Read More ›

A Cautionary Tale for Money Service Businesses: How Violating the Bank Secrecy Act Could Cost Millions

On February 27, 2017, The Financial Crimes Enforcement Network (“FinCEN”) fined Merchants Bank of California (“Merchants”) $7 million for what it called “egregious” violations of the Bank Secrecy Act (“BSA”). The Office of the Comptroller of the Currency simultaneously assessed a $1 million civil monetary penalty against Merchants because it violated two previous consent orders. Merchants is a community bank located in Carson City, California. The Bank had a large portfolio of Money Service Businesses (“MSBs”) customers. MSBs are generally recognized by federal regulators to include: (1) currency dealers or exchangers; (2) check cashers; (3) issuers of traveler’s checks, money orders, or stored value; (4) sellers or redeemers of traveler’s checks, money orders, or stored value; and (5) money transmitters. In Merchants’ case, it had 165 check-cashing and 44 money-transmitter customers, who often operated at great distances from the Bank. Compounding the situation was the fact that Bank insiders owned or managed a number of the MSB customers. Read More ›

Are Prices Free Speech? The Supreme Court is set to weigh in on whether merchant surcharges are protected as free speech

The Supreme Court recently agreed to review a case from the Second Circuit Court of Appeals holding that New York’s anti-surcharge provision was constitutional. Similar cases–with differing outcomes–have been heard in the Fifth and Eleventh Circuits, as well as a District Court in the Ninth Circuit.  The issue is this: in each of the states at issue, statutes prohibit “surcharges” but permit discounts to cash purchasers, whether explicitly (California and Florida) or by implication (New York and Texas).  For example:   Read More ›

At Risk: Community Banks and the Recovery of Losses Due to Merchant Data Breach

Regional and community Banks often serve as Issuer Banks by providing credit and debit cards to their customers. They also can often face losses because of downstream merchant data breaches that expose the credit and debit cards to misuse. The well known data breach of Target in late 2013 and Home Depo in 2014 are but two very public examples. Read More ›

Newly Enacted Legislation Prohibits Certain Amendments to Mortgages

In a relatively unnoticed enactment of the Kentucky General Assembly, KRS § 382.290 and KRS § 382.297 were amended by Senate Bill 148, effective July 1, 2015.  The amendment to § 382.290 merely codifies a generally accepted practice to include source deed descriptions within a mortgage. But the amendment to § 382.297 could have unintended consequences, as it prohibits an amended mortgage from altering the parties or the collateral of a recorded mortgage. Read More ›

Financial Institutions are Foreseeable Victims in Target Data Breach Cases

In an important decision regarding financial institution claims for recovery of losses resulting from data breaches, the United States District Court in Minnesota recently issued an Order denying Target’s attempt to dismiss all claims brought against it by financial institutions. Read More ›

TD Bank’s Settlement Agreement Provides Insight on State Privacy Concerns

TD Bank recently agreed to pay $850,000 as part of a multi-state settlement agreement with state attorneys from Connecticut, Florida, Maine, Maryland, North Carolina, New Jersey, New York, Pennsylvania, and Vermont. While the assurances in the settlement agreement only bind TD Bank, other companies with electronic records containing consumers’ personal information can benefit from this agreement by interpreting its requirements as minimum standards for their internal security policies and procedures. Read More ›

Ask the Blogger

Do you have a topic that you would like discussed in a future blog article? Please let us know. If you have a confidential question regarding a blog article, please feel free to contact the article's author directly, or let us know if you would like for someone to contact you directly.

Attorney Spotlight

Vincent E. Mauer represents clients in commercial and business disputes with particular emphasis on financial institutions and instruments, including financial institution bonds, securities, insurance policies and commercial loans.

Top