Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
Supreme Court to look at RESPA case
WASHINGTON (6/27/11)--Credit unions will want to be aware of last weeks U.S. Supreme Court decision to hear a Real Estate Settlement Procedures Act--or RESPA--class action case that involves title insurance. The case is known as First American Financial Corp. v. Edwards.

Broadly, the case revolves around whether a consumer, who based a purchase of title insurance on a referral by a real estate settlement agency--under conditiions the consumer claims violated RESPA's anti-kickback provisions, can sue in federal court if there is no evidence of actual injury.

Credit Union National Association Deputy General Counsel Mary Dunn said Friday that the case has significant implications for credit unions.

Credit unions work very hard to comply with all consumer protection laws they are subject to, such as RESPA for mortgage lenders. Also, they generally support reasonable legal protection for consumers.

However, awarding damages when a consumer is not harmed raises serious concerns and this issue deserves judicial review, she said.

To have standing to sue, the class representative, plaintiff Denise P. Edwards, had to meet three requirements, according to court documents: injury, causation, and redressability.

The defendants, First American Corp. and First American Title Insurance, argue that Edwards has not suffered a concrete injury and has not alleged that the charge for title insurance was higher than it would have been without the exclusivity agreement. In fact, the defendants have noted, the plaintiff cannot make that allegation because Ohio law mandates that all title insurers charge the same price.

If the Supreme Court rules against Edwards, CUNA's Dunn noted, it could help credit unions battle against unjustified, gotcha-types of lawsuits that are sometimes filed against lenders under RESPA.

A question raised but not answered so far in the case--and not likely to be addressed by the Supreme Court justices--is whether the title insurance company's tie-in arrangement with the title insurance company is, in itself, an improper arrangement.


RSS print
News Now LiveWire
Large CU stress testing on the agenda for the April @theNCUA open meeting http://t.co/2TUcnmCmPi
1 hours ago
#FinancialLiteracyMonth Test your college financial aid knowledge @nasfaa http://t.co/xgrDmHaw8W
9 hours ago
Join @theNCUA #NCUAchat with @KenWortheyJr on April 23 from 11am to 12pm EST http://t.co/TnNmfFh4Nl #FinancialLiteracyMonth
10 hours ago
Maine's patent troll bill has become law. Read more in Monday in @NewsNowLiveWire
13 hours ago
Wash. DFI discusses serving legal marijuana businesses with @NWCUA http://t.co/3kw79HJUYF
13 hours ago