BCLP Banking Blog

Main Content

Survey of 2015 Georgia Corporate Case Law Developments

March 31, 2016

Categories

The annual survey of decisions by state and federal courts during 2015 addressing Georgia corporate and business organization issues is now available.

This survey covers the legal principles governing Georgia businesses, their management and ownership. It catalogs decisions ruling on issues of corporate, limited liability company and partnership law, as well as transactions and litigation issues involving those entities, their governance and investments in them.

In 2015, there were a number of noteworthy decisions spanning a wide variety of corporate and business law issues. There were two significant decisions involving directors of corporations who simultaneously serve as trustees for trusts who hold a minority interest in the corporation – one dealing with liability issues, the other an insurance coverage dispute. Elsewhere, the Georgia Supreme Court issued an important opinion reaffirming the duty to read transactional documents and clarifying the circumstances under which that duty can be excused. The Supreme Court also addressed the availability of prejudgment interest in an action for specific performance of a stock purchase agreement, and the remedy of equitable partition in the context of a joint venture agreement. The Georgia Court of Appeals addressed two issues of first impression: the first dealing with a judgment creditor’s right to a charging order against an LLC member, the other dealing with an LLC’s right to recover for discomfort and annoyance in a nuisance action. The courts also dealt with interesting questions of jurisdiction and venue over corporate entities, including whether a foreign corporation or LLC with its corporate headquarters outside of Georgia can remove a tort action from the county in which it is filed to the county where its largest Georgia office is located.

Read More

Walt Moeling Selected as Lifetime Achiever

March 30, 2016

Categories

Atlanta Senior Counsel Walter Moeling has been selected as a Lifetime Achievement Award recipient by The Fulton County Daily Report. Moeling received the honor for his considerable contributions to the legal profession in Georgia.

For nearly 50 years, Moeling has been with Bryan Cave and its predecessor firm in Atlanta, Powell Goldstein. Moeling has counseled financial institutions on corporate governance matters, operational and regulatory issues, capital and acquisition strategies, board disputes and dissident shareholders, as well as other strategic decisions.

He has been recognized by Who’s Who in America. He has been ranked since 1998 in Best Lawyers, including as Best Lawyers’ 2015 Atlanta Financial Services Regulation Law “Lawyer of the Year” and as one of the top 10 lawyers in the state. He also has been featured annually in Chambers USA since 2003.

Read More

Crossroads: Banking and Fintech Conference in Atlanta 4/20-4/21

March 8, 2016

Categories

We are pleased to announce that we are co-hosting a conference with Banks Street Partners and TTV Capital that will take a new look at the opportunities that exist for the banking community within the evolving Fintech landscape.

The agenda features prominent industry speakers regularly quoted in the media as foremost experts in the banking and fintech arenas. The morning keynote will be given by Chris Nichols, Chief Strategy Officer for CenterState Bank. Chris Nichols is an active bank investor, entrepreneur and lover of quantified banking. He currently serves on the Editorial Advisory Board of Banking Exchange and is co-founder of Wall&Main, Inc. a leading platform for crowdfunding. Prior to joining CenterState, Chris was CEO of the capital markets arm of Pacific Coast Bankers’ Bank and is the former author of the Banc Investment Daily.

Read More

Rinearson Identifies How US is Behind in FinTech Innovation

January 6, 2016

Categories

London and New York Partner Judith Rinearson authored a “Bankthink” opinion piece posted on the front page of American Banker  on Dec. 28 regarding differences in how the payments industry is perceived and supported in the U.S. and Europe.

“My biggest surprise after moving to London in September is how far the U.S. has to catch up to the United Kingdom and other European Union countries in the fintech and payments innovation race. Compared with their U.S. counterparts, U.K. and EU regulators are really trying to encourage payment innovation through licensing regimes. One thoughtful and pragmatic step taken by the U.K.’s payments regulator, the Financial Conduct Authority, was to ask industry for its input on appropriate policy. But the U.K. and EU’s bigger advantage is how their ‘e-money’ and payment service licensing processes work compared with U.S. state money transmitter laws.”

Click here to read her full article.

Rinearson is leader of Bryan Cave’s global Prepaid & Emerging Payments Team and has recently been named co-chair of the firm’s new Fintech Team.

Read More

Bryan Cave Files Amicus Brief On Behalf of GBA in Overdraft Case

January 3, 2016

Categories

Byran Cave filed an amicus brief on behalf of the Georgia Bankers Association and the Georgia Chamber of Commerce in the Bickerstaff v. SunTrust Bank litigation currently pending before the Georgia Supreme Court in which a bank customer seeks to certify a class action against SunTrust to challenge the propriety of certain overdraft charges.

The trial court below ruled that while the plaintiff could opt out of an arbitration clause in the deposit agreement with SunTrust to pursue such challenges in his own right, the plaintiff could not do so on behalf of a class. The Georgia Court of Appeals affirmed the trial court ruling that “the deposit agreement contract and its arbitration clause prohibit [plaintiff] from altering others’ contracts where he is neither a party nor in privity with a party.” The plaintiff in the case then petitioned the Georgia Supreme Court to grant certiorari in the case. Certiorari was granted in September to resolve the issue.

Bryan Cave was thereafter retained by both the Georgia Banker’s Association and the Georgia Chamber of Commerce to weigh in and support the fundamental proposition that the deposit agreements should be honored by the courts and that strangers, such as the plaintiff, should not be permitted to interfere with such contracts under the guise of the class action rules. Bill Custer and Jen Dempsey of Bryan Cave, along with former Supreme Court Justices George Carley and Hardy Gregory appeared as counsel on behalf of the GBA and Chamber as amici. The case has now been fully briefed and oral arguments are set for January 4, 2016.

Read More

New Regs Will Change How Colleges Offer Bank Accounts to Students

December 31, 2015

Categories

On October 30, 2015, the Department of Education issued regulations to impose requirements on the marketing and terms of deposit and prepaid accounts offered to students at educational institutions that participate in Federal student aid programs. According to the DOE, the regulations are intended to ensure that students have convenient access to their title IV, Higher Education Act program funds, do not incur unreasonable and uncommon account fees on their title IV funds, and are not led to believe that they must open a particular financial account to receive Federal student aid. Most of these new rules take effect on July 1, 2016.

On December 16, the CFPB published a Safe Student Account Toolkit “to help colleges evaluate whether to co-sponsor a prepaid or checking account with a financial institution.” The Toolkit includes a Scorecard that can be used by schools when selecting a third-party vendor for student accounts and an Administrator Handbook designed to help school administrators gather relevant information to review, compare and evaluate accounts offered by different financial institutions.

The CFPB’s Toolkit provides guidance on the new DOE regulations, but with a focus on those provisions that are designed to protect students. The CFPB can bring and has brought enforcement actions against colleges under federal consumer protection laws. Their issuing of the Toolkit should be understood as a warning that they also will be enforcing the consumer protection portions of the DOE rules, though perhaps under their unfair, deceptive and abusive practices statute.

Read More

CFPB Guidance On Recurring Electronic Debits

November 30, 2015

Categories

On November 23, 2015, the CFPB issued a Bulletin alerting companies that they must obtain proper authorization from consumers before automatically debiting their accounts. The Bulletin relates to the Electronic Fund Transfer Act requirements for “preauthorized electronic fund transfers,” which are EFTs scheduled in advance to recur at substantially regular intervals. The preauthorized EFTs in the CFPB’s spotlight are those that debit a consumer’s account.

Regulation E of the EFTA provides that preauthorized EFTs from a consumer’s account must be authorized by a “writing signed or similarly authenticated by the consumer.” The authorization must be readily identifiable as such and have clear terms, and the person obtaining that authorization must provide a copy to the consumer. It’s important to keep in mind that these are two separate requirements. The Bulletin clarifies how a company can obtain the consumer’s authorization, and describes the critical elements of that authorization, but leaves unanswered certain questions about delivering a copy of the authorization to the consumer when it is obtained by telephone.

Content of the Authorization

As noted above, the consumer’s authorization must be readily identifiable as such and must have clear terms. The Bulletin states that companies sometimes provide consumers with notices of terms for preauthorized EFTs that fail to disclose “critical information.” The CFPB explains that the authorization must be clear as to the recurring nature of the transfers and the amount and timing of the payments agreed to. Of course the authorization also needs to identify the consumer and the account to be charged. Regardless of how the consumer’s authorization is obtained, which is discussed below, all of this information needs to be in the authorization and in the copy provided to the consumer.

Read More

Preventing Your Own Peach Breach

November 24, 2015

Categories

A Crash Course on Data Breach and Cyber Security

The recent disclosure by the Georgia Secretary of State of voter’s Social Security Numbers has caused a number of our clients – particularly those based in Georgia – to request additional information concerning how to prevent and respond to data security incidents.

To that end we have gathered together our recorded materials on effective breach prevention and response into a suggested week long training program with one suggested hour of programming every day the week following Thanksgiving. Celesq, the company that maintains the recordings of our programs, has agreed to waive the fee for any of our clients that wish to access them during the week.

  • Monday, November 30th: Data Security Boot Camp: A Crash Course in the Law
  • Tuesday, December 1st: Investigating Data Breaches: A Guide for In-House Counsel
  • Wednesday, December 2nd: Cyber-Insurance
  • Thursday, December 3rd: Data Breach Litigation
  • Friday, December 4th: Ethics and Data Breach Investigation

To receive a registration waiver, email Audrey Brekel at audrey.brekel@bryancave.com. To sign up for any, or all, of the days, please follow the directions here.

Read More

Second Circuit Adopts Broad Interpretation of Dodd-Frank’s Anti-Retaliation Provision

November 4, 2015

Categories

On September 10, 2015, a divided Second Circuit appeals court held in Berman v. Neo@Ogilvy LLC, that an employee who reports wrongdoing internally to management is considered a “whistleblower” under the Dodd-Frank Act, thereby strengthening retaliation protections for employee whistleblowers.

There has been a history of tension between the Dodd-Frank statutory definition of “whistleblower” and the applicability of the Dodd-Frank anti-retaliation provisions to employees who report suspected misconduct internally.    The Act defines a “whistleblower” as “any individual who provides…information relating to a violation of the securities laws to the Commission…”  However, section 78u-6(h)(1)(A)(iii) of the Act prohibits retaliation against “a whistleblower” who makes disclosures “required or protected” by the Sarbanes-Oxley Act.  The U.S. Securities and Exchange Commission’s regulations interpret the term “whistleblower” to include for retaliation purposes employees who report or disclose potential wrongdoing either internally or to the SEC (SEC Rule 21F-2(b)(1)).  This has led to a Circuit split among federal courts as to whether or not Dodd-Frank protects against retaliation only if the whistleblower reports the wrongdoing to the SEC, or if its protections also extend to whistleblowers who report misconduct internally to  management.

Read Bryan Cave’s client alert on the Second Court’s Decision in Berman v. Neo@Ogilvy LLC.

Read More

CFPB “Guidance” on Marketing Services Agreements

October 19, 2015

Categories

On October 8, 2015, the CFPB announced new “Guidance About Marketing Services Agreements,” publishing a Compliance Bulletin on the subject of RESPA Compliance and Marketing Services Agreements.  The Bulletin is lacking in clear “guidance,” at least in the sense of outlining regulatory standards, but it does provide an unequivocal warning that marketing services agreements (MSAs) in the mortgage industry are much less likely to pass regulatory scrutiny than in the past.

The CFPB expresses “grave concerns” about the use of MSAs to evade the requirements of RESPA, and they note that certain mortgage industry participants have already stopped entering into MSAs given the RESPA compliance burdens.  To ensure that the industry is getting the message, they warn that careful consideration of the legal and compliance risks “would be in order” for all industry participants, especially in light of the increase in whistleblower complaints under RESPA.

Every MSA must comply with the RESPA Section 8 prohibition on the payment or receipt of any fee, kickback or other “thing of value” for the referral of mortgage loan or other “settlement services” business.  However, compensation for goods or facilities actually furnished or services actually performed is permissible under Section 8, at least so long as the compensation reflects the fair market value of the goods, facilities or services.  The industry has long attempted to rely on this exception for the payments for services actually performed as a means to avoid Section 8 violations.  This has usually worked in the past, but it’s going to be much harder to make this work in the future.

Read More
The attorneys of Bryan Cave Leighton Paisner make this site available to you only for the educational purposes of imparting general information and a general understanding of the law. This site does not offer specific legal advice. Your use of this site does not create an attorney-client relationship between you and Bryan Cave LLP or any of its attorneys. Do not use this site as a substitute for specific legal advice from a licensed attorney. Much of the information on this site is based upon preliminary discussions in the absence of definitive advice or policy statements and therefore may change as soon as more definitive advice is available. Please review our full disclaimer.