Post by UKIPA Holdings, LLC on Mar 15, 2015 19:53:17 GMT 4
Montana House committee kills bill to protect banks in fraud lawsuits.
HELENA – A House committee Friday voted to kill a measure protecting banks from liability in lender lawsuits, one day after several homeowners who’d battled with out-of-state banks over foreclosures testified against it.
The House Business and Labor Committee voted 10-9 to kill Senate Bill 280, which would change the law to say lawsuits alleging contract fraud on loans can be filed only for a violation in writing.
Banks and their lobbyists supported the bill, saying it would fix problems caused by a 2014 Montana Supreme Court decision that said oral discussions between a bank and its customers are admissible in court to prove fraud.
They said the court decision has chilled discussions between banks and their customers over problem loans, making it difficult to conduct business.
Two Republicans, including the committee chair, Rep. Tom Berry of Roundup, joined the panel’s eight Democrats in opposing the bill.
“I can’t see where this will affect the verbal relationship between the consumer and the bank,” he said. “I don’t think we’re taking away the right to talk to your banker or anyone else.”
Berry, an insurance agent, said he talks to his customers all the time, and that if insurance agents misrepresent something, consumers have the right to sue them.
“I just think the consumers should have the same right here,” he said.
Other Republicans on the panel said banks need the protection so they can continue to have frank discussions with customers about problem loans, without the fear of getting sued.
“It’s kind of absurd that oral conversations somehow can change or modify a written contract,” said Rep. Steve Fitzpatrick, R-Great Falls. “Unless this is passed, we’re going to have serious ramifications for Montana banks.”
Jim Brown, an attorney representing the Montana Independent Bankers Association, said Friday he was disappointed with the vote, and that the court decision is harming how banks do business with their customers.
“It will continue to impact how we do business with our customers, which in our opinion is not pro-consumer,” he said. “As a result of the actions of the too-big-to-fail banks, the community banks have suffered the real consequences as part of those bad actions. We feel like we’ve been caught up in practices that had nothing to do with Montana, but the impact is being felt in Montana.”
At a hearing on the bill Thursday, several homeowners who sued Bank of America for repeatedly misleading them in talks about modifying a troubled mortgage testified against the bill.
They said if the bill had been state law, their lawsuits would have been blocked, and Bank of America would have gotten away with lying to them and unfairly taking away their home.
The homeowners acknowledged that their complaints mostly were aimed at big, out-of-state banks that had bought the mortgages from local banks.
While the committee voted Friday to kill SB280, it voted along party lines, with Republicans in favor, to pass a companion bill, SB281, that eliminates punitive damages in consumer-protection lawsuits.
Article: ravallirepublic.com/missoula/news/state-and-regional/montana-legislature/article_bd108fc1-5abd-5c8f-adcc-d2c220946df3.html
HELENA – A House committee Friday voted to kill a measure protecting banks from liability in lender lawsuits, one day after several homeowners who’d battled with out-of-state banks over foreclosures testified against it.
The House Business and Labor Committee voted 10-9 to kill Senate Bill 280, which would change the law to say lawsuits alleging contract fraud on loans can be filed only for a violation in writing.
Banks and their lobbyists supported the bill, saying it would fix problems caused by a 2014 Montana Supreme Court decision that said oral discussions between a bank and its customers are admissible in court to prove fraud.
They said the court decision has chilled discussions between banks and their customers over problem loans, making it difficult to conduct business.
Two Republicans, including the committee chair, Rep. Tom Berry of Roundup, joined the panel’s eight Democrats in opposing the bill.
“I can’t see where this will affect the verbal relationship between the consumer and the bank,” he said. “I don’t think we’re taking away the right to talk to your banker or anyone else.”
Berry, an insurance agent, said he talks to his customers all the time, and that if insurance agents misrepresent something, consumers have the right to sue them.
“I just think the consumers should have the same right here,” he said.
Other Republicans on the panel said banks need the protection so they can continue to have frank discussions with customers about problem loans, without the fear of getting sued.
“It’s kind of absurd that oral conversations somehow can change or modify a written contract,” said Rep. Steve Fitzpatrick, R-Great Falls. “Unless this is passed, we’re going to have serious ramifications for Montana banks.”
Jim Brown, an attorney representing the Montana Independent Bankers Association, said Friday he was disappointed with the vote, and that the court decision is harming how banks do business with their customers.
“It will continue to impact how we do business with our customers, which in our opinion is not pro-consumer,” he said. “As a result of the actions of the too-big-to-fail banks, the community banks have suffered the real consequences as part of those bad actions. We feel like we’ve been caught up in practices that had nothing to do with Montana, but the impact is being felt in Montana.”
At a hearing on the bill Thursday, several homeowners who sued Bank of America for repeatedly misleading them in talks about modifying a troubled mortgage testified against the bill.
They said if the bill had been state law, their lawsuits would have been blocked, and Bank of America would have gotten away with lying to them and unfairly taking away their home.
The homeowners acknowledged that their complaints mostly were aimed at big, out-of-state banks that had bought the mortgages from local banks.
While the committee voted Friday to kill SB280, it voted along party lines, with Republicans in favor, to pass a companion bill, SB281, that eliminates punitive damages in consumer-protection lawsuits.
Article: ravallirepublic.com/missoula/news/state-and-regional/montana-legislature/article_bd108fc1-5abd-5c8f-adcc-d2c220946df3.html