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News Now

Washington
RESPA issues hang as Supreme Court declines to rule
WASHINGTON (6/29/12)--The U.S. Supreme Court on Thursday refused to rule on a case that asked whether statutory standing was sufficient to sue under the Real Estate Settlement Procedure Act (RESPA).

The case, First American Financial Corp. v. Edwards, centered on whether a consumer, who based a purchase of title insurance on a referral by a real estate settlement agency--under conditions the consumer claims violated RESPA's anti-kickback provisions--can sue in federal court if there is no evidence of actual injury.

Denise P. Edwards claimed First American Financial did not inform her of an exclusive business arrangement with its title insurance agent, First American Title Insurance, when it made the referral.

First American Financial argued that Edwards did not suffer a concrete injury and that she did not allege that the charge for title insurance was higher than it would have been without the exclusivity agreement. First American Financial also noted that Edwards cannot make that allegation, and she therefore suffered no harm as a result of the exclusive business arrangement, because Ohio law mandates that all title insurers charge the same price.

The case made its way up to the ninth circuit appellate court, which concluded that Edwards had the right to sue under RESPA, regardless of whether she was overcharged for services or not.

First American Financial last year filed a writ of certiorari asking the higher court to review the case, which was accepted by the Supreme Court, and oral arguments were heard. But the Supreme Court yesterday said the writ was "improvidently granted." There is no clear reason why the Supreme Court decided not to issue an opinion in the case.

"While it was hoped that the Supreme Court's opinion in First American Financial could help minimize or prevent unjustified lawsuits, such as those involving outside ATM notices where no actual damages have been alleged, the Court's approach today is not likely to have much bearing on that issue," Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said.

A legislative fix for ATM litigation issues that have caused significant issues for many credit unions and other financial institutions is making its way through the U.S. Congress, however, and that bill could see a vote in the full House after the upcoming July 4 district work period.

Use the resource link below to read a June 28 News Now story, "ATM bill vote a step forward for CUs: CUNA."


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