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A bill designed to help protect Montana bankers recently passed The Treasure State's House and Senate. Senate Bill 280 was introduced after the Montana Supreme Court ruled in 2014 that borrowers can press legal action in lending disputes on the basis of presumed oral agreements, according to American Banker.
Legal claim
The court decision stemmed from a lawsuit, titled Morrow v. Bank of America, which was originally filed in May 2011 in the District Court of Lewis and Clark County, American Banker reported. The lawsuit involved claims that homeowners Abraham and Betty Jean Morrow received advice from an employee of the bank that they could qualify for a loan modification by missing a payment.
Bank of America claimed that its employees would never give homeowners the advice that the plaintiffs claimed they received, according to American Banker. In addition, the bank contended it had adequate justification for declining the request the Morrows made for a modification, as the couple had previously relocated to Montana from South Carolina, where they had business interests.
Court ruling
In spite of Bank of America's arguments - and the fact that the plaintiffs lacked a written agreement involving the loan modification - Chief Justice Mike McGrath ruled in favor of the Morrows, writing in an opinion that the discussions between the Morrows and the Bank of America employees were more than "the usual arms-length debtor-creditor relationship."
After the Montana Supreme Court remanded the lawsuit to a district court, Bank of America reached a settlement with the plaintiffs in November 2014, according to American Banker. While the court ruling involved a mortgage dispute, bankers have expressed concerns the decision could be applied to all kinds of loans, Steve Turkiewicz, president and CEO of the Montana Bankers Association, stated during a recent interview.
New legislation
However, Turkiewicz maintained the bill introduced in the Montana legislature addresses these concerns, American Banker reported. The piece of legislation passed the Senate without tremendous difficulty, but ran into some challenges in the House, according to Sen. Eric Moore, R-District 19, who introduced the bill.
In March, the House Business and Labor Committee rejected Senate Bill 280, according to USA Today. However, after lawmakers amended the legislation to exempt home loans, the bill obtained approval in the House. Now that the legislation passed the House, it should arrive at the desk of Gov. Steve Bullock after undergoing a reconciliation process, American Banker reported.
Garnet Capital Advisors 500
Mamaroneck Avenue, Harrison, NY 10528
(914) 909-1000
info@garnetcapital.comGarnet Capital Advisors 500
Mamaroneck Avenue, Harrison,
NY 10528
(914) 909-1000
