Monday, February 28, 2011

Rain Out

Today we started putting fence rails on the new garden fence.  By the time we installed 5 rails, the skies had dropped enough moisture to send us inside, me to work on impending deadlines.  So I've used today to scan a couple thousand pages of court decisions. 

The financial crisis has obviously taken its toll on the courts.  A rash of predatory lending suits lists every possible mortgage-related federal statute, and many state laws, as the basis for laundry lists of claims.  Most complaints illustrate a lack of creativity among plaintiffs and their lawyers.  They're generally so similar they're hardly worthwhile reading.  Mostly, I watch for old theories being adopted by additional jurisdictions.  Now and then an interesting theory appears.  None today, although I felt a bit sorry for one bankruptcy judge who came up with a nonsensical holding based on his decision to look up the meaning of "originate" in an Internet dictionary.  Did he really have no idea that the term has a pretty clear meaning in the mortgage business?  No surprise, his holding was overturned.

The more interesting decisions fell outside mortgage lending.  Did you ever get mad when you missed your credit card payment date by one or two days, maybe because the mail was slow?  Say you always paid your balance in full, except for that one time?  Boom!  Not only did you have to pay interest for the one or two days late, plus maybe a late charge, you also had to pay interest on the entire preceding billing cycle?  Good reason to set up electronic bill payment with the credit card issuer.  Well, in this case, the cardholder's husband walked the payment into the nearest PNC Bank branch on the due date, a Saturday.  Too bad, it wasn't the location specified on the credit card statement, so the payment wasn't posted and credited until Monday.  The bank "correctly" imposed a finance charge for the 2 days, plus the 32 days of the previous billing cycle.  Because the husband took the payment to the wrong place, the bank had up to 5 extra days to process the payment.  Ouch!

Target apparently did something stupid.  Wanting to replace its in-store "Guest" credit cards, it reportedly mailed Target VISA cards to existing and former cardholders.  The cardholders had the option of calling a toll-free number to validate the VISA cards or cutting them up and staying with their Target Guest Cards.  I guess no one reminded Target that it's not supposed to send out unsolicited credit cards.  Fun-time for a class action!

Then there's the sleazy car dealer who gets you to sign a retail installment sales contract to buy a used car, setting forth the terms of the deal and providing required Truth-in-Lending disclosures (such as the annual percentage rate and payment schedule).  "What's this," you say, "looks likes this contract isn't firm?" You hold up a "Limited Right to Cancel-Purchase," a/k/a "spot delivery agreement," that gives the dealer the right to change the terms of your agreement if it isn't able to sell your contract to the lender that offers the best terms.  "Don't worry," says the dealer, "it's just a legal form.  We have everyone sign it."  A couple days later, the dealer tells you your contract had some errors, so you need to come in and sign another one.  The old "bait and switch."  Ha-ha.  Fortunately, the dealer didn't have the last laugh.

"I guess we need to be careful what we sign," says Virginia.

Yes, even though the stack of documents is 2 inches high and even though you might eventually win in court.  The new Consumer Financial Protection Bureau set up by the Dodd-Frank financial reform act plans to look at the challenge of voluminous disclosures.  In the meantime, happy reading.

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