Tag Archives: class action

HERA Settles Class Action Against Chase for Violating Fair Debt Collection Laws in Collecting Purchase Money Home Loans

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Oakland, California, May 26, 2017-   Judge Winifred Smith of the Alameda County Superior Court approved the settlement of Housing and Economic Rights Advocates’ (HERA) longstanding class action lawsuit against Chase Bank for deceptive practices in collecting purchase money mortgage loans.

HERA filed Banks v. JPMorgan Chase Bank (Case No. RG12614875) in January 2012 under California’s purchase money anti-deficiency law, challenging Chase’s attempts to collect mortgages used to purchase family homes. After four years of hotly contested litigation, including HERA’s amicus curiae participation in four related appellate cases, a settlement was reached.  HERA’s Banks case was designated the lead case that consolidated four related anti-deficiency class actions for joint settlement.

Judge Smith granted final settlement approval and entered final judgment on December 9, 2016. The settlement awards $500,000 in statutory damages to Chase borrowers from whom Chase attempted to collect loan balances on purchase money loans; a payment of $364 to each class member regardless of whether they made payments in response to Chase’s collection attempts. The settlement provides additional compensation to class members who made payments, prevents Chase from engaging in further collection efforts, and requires Chase to provide corrective credit reports to the major credit reporting bureaus stating that the borrowers do not owe anything on the loans.

HERA litigation attorneys Arthur Levy, Elizabeth Letcher, and Noah Zinner led the litigation effort, with co-counsel Kemnitzer, Barron & Krieg.

For more information please contact, Maeve Elise Brown Executive Director, Housing and Economic Rights Advocates, at melisebrown@heraca.org or (510) 271-8443.

Predatory Lending Class Action Against CashCall Opens New Chapter as Federal Courts Turn to California Supreme Court for Guidance

Senior Asian Couple At Home Relaxing On Sofa TogetherOakland, California, May 26, 2017- The nine-year marathon class action litigation attacking CashCall’s exorbitantly high interest loans entered a new phase last month when the federal Ninth Circuit Court of Appeals took the unusual step of requesting guidance from the California Supreme Court on relevant state law.

CashCall pioneered the high-interest $2,600 personal loan in 2005.  California’s usury law does not place fixed interest rate limits on personal loans in excess of $2,500. CashCall took advantage of this loophole to make $2,600 loans in California at interest rates as high as 135%. Other lenders followed suit, charging rates as high as 200% to Californians seeking short-term loans.

These loans are “subprime,” and typically offered to borrowers with low credit scores, uneven credit histories, and who are in financial distress. CashCall uses saturation TV advertising urging viewers to just get up and “make the cash call.” CashCall’s website says you can “APPLY IN MINUTES & GET CASH TODAY!” with an easy online application.

The class action, filed in June 2008, challenges CashCall’s loans under California’s “unconscionability” law.  This law empowers courts to strike down loans that are unreasonably one-sided or unfair. The case ended up in the federal Court of Appeals after a San Francisco federal judge ruled the courts do not have the authority to invalidate consumer loans or to provide relief to borrowers.

In April 2017, the Ninth Circuit Court of Appeals issued a decision invoking the unusual procedure of certifying a question of state law to the California Supreme Court. The federal appeals court asked the California Supreme Court whether loans over the dollar amount of the usury limit ($2,500) can be invalidated under California’s unconscionability doctrine.

Plaintiffs in the case are hopeful that the California Supreme Court will take advantage of this opportunity to issue a ruling protecting California borrowers against predatory loans and validating court power to curb unconscionable lending in California.

HERA’s Director of Litigation, Arthur Levy, is co-lead counsel in the CashCall case with four other law firms.

For more information please contact, Maeve Elise Brown Executive Director, Housing and Economic Rights Advocates, at melisebrown@heraca.org or (510) 271-8443.