All items from Florida Banking Law Blog

Authored by Adam B. Brandon of Rogers TowersAs 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.


Posted 5 days 2 hours ago

Authored by Armando Nozzolillo and Michael S. Waskiewiczand Armando Nozzolillo and Michael S. Waskiewicz of Rogers TowersRecently, the Eleventh Circuit Court of Appeals (the “Court”) ruled whether filing a proof of claim in a chapter 13 bankruptcy case after the statute of limitations on the ability to collect the debt expires violates the FDCPA.  In Crawford v. LVNV Funding, LLC, et. al., Debtor was indebted to a furniture company.  A third-party creditor (the “Creditor”) eventually purchased the debt from the furniture company.  In 2004, pursuant to the Alabama statute of limitations, the debt became unenforceable in both state and federal court.
Four years after the limitations period expired, the Debtor filed a voluntary chapter 13 bankruptcy petition in Alabama.  The Creditor proceeded to file a proof of claim in the Debtor’s bankruptcy case.  The Debtor subsequently filed a counterclaim arguing Creditor routinely filed stale claims to collect time-barred debt in violation of the FDCPA.  The Court held that Creditor’s actions in filing its proof of claim after the expiration of the limitations period was an attempt to enforce the time-barred debt, and thus, violated the FDCPA.

Posted 1 week 2 hours ago

Authored by Samantha Alves Orender of Rogers TowersWe 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 such regulation states that a creditor cannot require an applicant’s spouse or other person (other than a joint applicant), to sign the credit document if the applicant him or herself qualifies under the creditor’s standards of creditworthiness for the amount and terms requested.

Posted 1 week 4 days ago

Authored by Janet C. Owens and Scott J. Kennelly and Janet C. Owens and Scott J. Kennelly of Rogers TowersBecause intent is a key element of usury, a lender may be able to successfully defend against a claim of usury if it can demonstrate that the interest was demanded, or in some cases even collected, through inadvertent error. In such cases, the element of intent is lacking.
For example, one common error involves the situation where the borrower is in default under the loan documents and the lender fails to adjust its accounting method when charging the default interest rate. Florida courts have held that an otherwise non-usurious loan will not become usurious merely because usurious interest is claimed or demanded under it; rather, the borrower must prove that the lender actually intended to charge or collect interest in excess of the statutorily prescribed maximum rates.

Posted 1 week 6 days ago

Authored by Adam B. Brandon of Rogers TowersThe 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 loans are in default.
In Gann v. BAC Homes Loan Services, LP, a bank agreed to permanently modify a loan.  The borrower then timely made payments in accordance with the modification agreement.  However, the bank sent the borrower a letter which claimed that she was in default under the original terms of the loan.  The bank threatened to foreclose its mortgage unless the borrower paid the amount which the bank claimed she owed.  In response, the borrower sued the bank for violating the FCCPA by ignoring the terms of the loan modification and attempting to enforce an illegitimate debt.

Posted 2 weeks 5 days ago

Authored by J. Ellsworth Summers, Jr.and Scott St. Amand of Rogers TowersIn numerous previous posts, we have noted that the purpose of the Bankruptcy Code is to help the “honest but unfortunate debtor.”  Like gerrymandering, certain “creative” debtors have attempted to classify their non-dischargeable debt as a separate, special class of unsecured creditors.  In a recent case out of the Eighth Circuit, In re Copeland, the court summarily dismissed the debtors’ argument that they had not unfairly discriminated against their other unsecured creditors.

Posted 3 weeks 2 hours ago

Authored by Douglas L. Waldorf, Jr. of Rogers TowersLegal standing to foreclose a note and mortgage continues to be an issue that frustrates plaintiffs and delights defense counsel.  Florida courts have consistently held that standing must exist when the lawsuit is filed and the lack of standing cannot be “cured” absent a dismissal and refiling of the case.  At a minimum this adds to the time and expense of a foreclosure.  In situations where a statute of limitations prevents refiling, it could spell disaster.

Posted 3 weeks 5 days ago

Authored by Heather S. Nason of Rogers TowersCommercial mortgage lenders of non-owner occupied property need to be adept at reviewing leases to protect themselves from risk.  Although the rent roll is a useful tool, some lenders learned during the economic downturn that it was a mistake to rely solely on the rent roll for a picture of the future income stream of a commercial property.  Lease agreements of retail space, in particular, carry some unique terms that could impact the lender in ways a typical office or industrial lease may not.  A thorough review of the lease agreements not only helps to protect the lender from risks in the borrower’s ability to meet its debt service, but also can help identify provisions that might negatively impact the lender in the event of a default.   A lender should be wary of the following:

Posted 3 weeks 6 days ago

Authored by Scott J. Kennellyand Janet C. Owens of Rogers TowersWhen borrowers default under the terms of their loans, lenders often, in accordance with the loan documents, can assess late fees against the borrower.  When lenders assess late fees around the time of or after a loan matures or is accelerated, however, the imposition of late fees has the potential to become usurious under Florida law.  Because the penalties for violation of the Florida usury statutes are severe, lenders should tread carefully when dealing with transactions that have the potential to become usurious, and should take proactive steps to become informed as to which lending practices will or will not run afoul of Florida’s usury laws.

Posted 4 weeks 5 days ago

Authored by Scott St. Amandand J. Ellsworth Summers, Jr. of Rogers TowersTwenty-seven years ago the Second Circuit was faced with a debtor who proposed to use the Bankruptcy Code to avoid her student loan debt – only five months after graduation.  The Second Circuit came down harshly on Ms. Brunner and established an “undue hardship” test, which few debtors have passed since the decision in the Brunner case.  Eleven of the federal circuit courts, including the Eleventh Circuit, have adopted the Brunner “undue hardship” test, and there have been few significant challenges to the standard over the nearly three decades of its existence.
Since Brunner was decided, however, the Bankruptcy Code has changed significantly and the nation’s student loan debt has risen at an astonishing rate.  In 1987, educational debt was approximately $42 billion.  Fast forward twenty-seven years later, and there is nearly $1 trillion in outstanding educational debt – an increase of 2281%.  This dramatic increase has led some commentators to argue that Brunner is outdated, and changes need to be made to bankruptcy courts’ approach to student loan forgiveness.

Posted 4 weeks 6 days ago