Daily Archives: January 3, 2013

U.S. Appeals Court overturns order requiring Wells Fargo to pay back debit card customers

A federal appeals court in San Francisco overturned a lower court order requiring Wells Fargo Bank to pay its California debit card customers $203 million restitution for allegedly excessive overdraft fees.

On Dec. 26, the 9th U.S. Circuit Court of Appeals said the San Francisco-based bank’s former practice of processing debits in a way that maximized overdraft fees was “a pricing decision authorized by federal law.”

But the court also left the door open for the customers to go back to a federal trial judge to seek restitution under a state law that bans
business fraud.

The appeals court ruled in a class-action lawsuit filed in federal court in San Francisco on behalf of California debit card customers in 2007 to challenge the bank’s procedure for posting debit purchases to customers’ checking accounts.

Attorney Richard McCune estimated there are more than one million California debit card holders in the class approved by U.S. District Judge William Alsup, the trial judge in the case.

Read on.

Class Counsel Announce Proposed Settlement in the Bank of America Corp. Securities Litigation

NEW YORK, Jan. 3, 2013 /PRNewswire via COMTEX/ — The following statement is being issued by Kaplan Fox & Kilsheimer LLP, Bernstein Litowitz Berger & Grossmann LLP, Kessler Topaz Meltzer & Check LLP regarding the Bank of America Corp. Securities Litigation.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

IN RE BANK OF AMERICA CORP. SECURITIES, DERIVATIVE, AND EMPLOYEE RETIREMENT INCOME SECURITY ACT (ERISA) LITIGATION

THIS DOCUMENT RELATES TO: Consolidated Securities Action, Master File No. 09 MDL 2058 (PKC), ECF CASE

SUMMARY NOTICE OF (I) PROPOSED SETTLEMENT AND PLAN OF ALLOCATION; (II) SETTLEMENT FAIRNESS HEARING; AND (III) MOTION FOR AN AWARD OF ATTORNEYS’ FEES AND REIMBURSEMENT OF LITIGATION EXPENSES

Read on.

Fiscal Cliff (Pork) Notes

ABC News highlights below, it is the ‘pork’ that stuffed the bill…

The mix of tax perks covering the next year, but with budget implications for the next two years, includes everything from incentives for employers to hire veterans to incentives for employers to invest in mine safety. But it also includes these:

 

  • $430 million for Hollywood through “special expensing rules” to encourage TV and film production in the United States. Producers can expense up to $15 million of costs for their projects.
  • $331 million for railroads by allowing short-line and regional operators to claim a tax credit up to 50 percent of the cost to maintain tracks that they own or lease.
  • $222 million for Puerto Rico and the Virgin Islands through returned excise taxes collected by the federal government on rum produced in the islands and imported to the mainland.
  • $70 million for NASCAR by extending a “7-year cost recovery period for certain motorsports racing track facilities.”
  • $59 million for algae growers through tax credits to encourage production of “cellulosic biofuel” at up to $1.01 per gallon.
  • $4 million for electric motorcycle makers by expanding an existing green-energy tax credit for buyers of plug-in vehicles to include electric motorbikes.

And the not so Cliff Cliff notes from Bloomberg.

 

Wind farms, motorsports tracks, global banks and other businesses won revived tax breaks in a $75.3 billion package included in a last-minute budget deal Congress passed yesterday.

 

The tax-break extensions, mostly for companies, made it into the bill past Republican demands for spending cuts and Democratic resistance to benefits for businesses. Both parties have complained for years about some of the special-interest provisions.

 

Most of the tax breaks had expired at the end of 2011 and will be extended through 2013. The companies that benefit say the on-again, off-again breaks are important though the uncertainty makes it almost impossible to use them to plan business investments.

 

Although they are lumped together, the miscellaneous tax breaks are very different.

Some are broad, like the credit for corporate research, which is backed by a coalition of technology companies, manufacturers and lawmakers such as Representative Kevin Brady, a Texas Republican, and Senator Max Baucus, the Montana Democrat who is chairman of the Finance Committee. The two-year extension of the research credit would cost the government $14.3 billion in forgone revenue.

 

Some breaks are specialized, like the $11.2 billion, two- year extension of the active financing exception, which lets GE, Caterpillar Inc. (CAT) and Citigroup Inc. (C), among others, defer taxes on financing income they earn outside the U.S. The congressional supporters of this provision include Pat Tiberi, an Ohio Republican, and Richard Neal, a Massachusetts Democrat, both senior members of the House Ways and Means Committee.

 

Others are narrow and often ridiculed by lawmakers. They include $78 million worth of accelerated depreciation for motorsports tracks, $248 million in special expensing rules for films and television programs, and a $222 million provision that directs excise taxes on imported rum to Puerto Rico and the U.S. Virgin Islands.

 

Alex Brill, a former aide to Republicans on the House Ways and Means Committee, said tax breaks that some consider questionable — such as the motorsports benefit backed by International Speedway Corp. (ISCA) and Senator Debbie Stabenow, a Michigan Democrat — are often made temporary as a compromise.

 

Whirlpool Corp. (WHR) benefits from a $650 million tax credit for manufacturing energy-efficient appliances. JPMorgan Chase & Co. (JPM) and other financial institutions are aided by the $1.8 billion extension of the New Markets Tax Credit for investments in low- income areas. That is supported by Representative Jim Gerlach, a Pennsylvania Republican, and Senator Jay Rockefeller, a West Virginia Democrat.

 

Restaurants such as Cracker Barrel Old Country Store Inc. (CBRL) and McDonald’s Corp. (MCD) benefit from the $1.9 billion extension of the Work Opportunity Tax Credit for hiring workers from disadvantaged groups.

 

The bill includes a one-year extension through 2013 of the production tax credit for wind power, at a cost of $12.2 billion. That will save as many as 37,000 jobs in an industry that’s expected to stall this year, the American Wind Energy Association said.

OUTGOING UTAH A.G. SAYS THERE’S NO LINK BETWEEN HIS SUPPORT OF BOFA FRAUDCLOSURE SETTLEMENT AND HIS NEW FIRM HAVING BANK AS CLIENT

Just days before leaving office, Attorney General Mark Shurtleff has reversed the state’s position and personally signed on to a settlement in a foreclosure lawsuit that Bank of America appeared to be losing.

The practical effect of Shurtleff’s move, according to an attorney who filed the lawsuit, is to weaken Utah’s ability to enforce state law. It also weakens the state’s position in other lawsuits challenging foreclosures carried out by ReconTrust Co., Bank of America’s foreclosure arm, Abraham Bates said.

Members of the Attorney General’s Office said Shurtleff’s actions blind-sided them, but they declined to comment publicly. The office had previously successfully intervened in the case as a plaintiff and argued that ReconTrust had violated state law in foreclosing on Utah homeowners Timothy and Jennifer Bell.

U.S. District Judge Bruce Jenkins, who presides over the case, issued a strong ruling in favor of the homeowners’ and the state’s position. The assistant attorneys general conducting the state’s case hoped to keep it alive for a final ruling by Jenkins before a likely appeal to the 10th Circuit Court of Appeals for a definitive decision that would guide other similar lawsuits.

Shurtleff leaves office on Monday and has announced he’ll join the international law firm of Troutman Sanders LLP. On its website, the firm says it “regularly represents Bank of America.”

Rest here…

LOCKSMITHS SAY THEY’LL NO LONGER ASSIST WITH EVICTIONS

Spanish banks looking to foreclose on delinquent mortgage owners in and around Pamplona will no longer have the assistance of the community’s locksmiths. Last month, they announced they would no longer change the locks on people banks want to evict.

In Spain, in 2012, more than 50,000 families were evicted from their homes when they failed to pay their rent or mortgage.

As the year wound down, a handful of people committed suicide after learning they would be evicted. Now, in Pamplona, a group of experts who help carry out the evictions has said ‘No more.’ Those experts?Locksmiths.

It’s a pretty ingenious way to stop evictions, really.

The police might come and drag debtors out. But if no one changes the locks on the apartment, the bankcan’t repossess it, because the evictees can get back in.

And the legal proceedings to get them out again would take months, even years.

Banks and government authorities have been evicting an average of two families a day in recent months in and around Pamplona. Locksmiths like Iker de Carlos are hoping to put an end to it. De Carlos says in this small city, the dozen or so locksmiths often know the people they have to lock out.

Rest here…

LIBOR Class Action: Carl Payne; Kenneth Coker v. Bank of America; Barclays Bank; Citigroup

A dozen banks and their subsidiaries violated federal anti-racketeering law in manipulating the London interbank offered rate (Libor) for the U.S. dollar to give the appearance of financial stability, a class claims.

USDC Northern District of California
Plaintiffs: Carl A. Payne  and Kenneth W. Coker
Defendants: Bank of America Corporation, Bank of America, N.A., Barclays Bank PLC, Citigroup, Inc., Citibank N.A., Cooperative Centrale Raiffeisen-Boerenleenbank B.A., Credit Suisse Group, AG, Deutsche Bank AG, HSBC Holdings PLC, HSBC Bank PLC, JPMorgan Chase & Co., Chase Bank USA, N.A., Lloyds Banking Group PLC, Royal Bank of Canada, Royal Bank of Scotland, UBS AG and West LB AG
Case Number: 4:2012cv06571
Filed: December 31, 2012
Court: California Northern District Court
Office: Oakland         Office
County: San Francisco
Presiding Judge: Donna M. Ryu
Nature of Suit: Other Statutes – Racketeer Influenced and Corrupt Organizations
Cause: 18:1962
Jurisdiction: Federal Question
Jury Demanded By: Plaintiff

Experts Back Ex-Deutsche Bank Employees’ Claims That Bank Hid $12 Billion

Accounting experts back up claims by three former employees of Deutsche Bank AG (DB), who accuse the bank of hiding $12 billion in paper losses during the economic crisis so that it could avoid a government bailout. The bank calls the allegations “wholly unfounded.”

Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) does seem to have “improperly accounted” for its losses according to accounting experts cited by the Financial Times.

Read on.