Banking

Wells Fargo Force-Placed Insurance Class Action. Himmelstein Law Network represented homeowners with mortgages serviced by Wells Fargo who were “force-placed” into hazard and flood insurance. Mortgage lenders generally require that homeowners maintain adequate hazard and (where applicable) flood insurance, to protect the lender’s interest in the property. If the homeowner allows the coverage to lapse, new coverage is obtained by the mortgage servicer, who passes the cost on to the homeowner. This is called “force-placed” insurance.

Plaintiffs alleged that Wells Fargo and American Security Insurance Company (ASIC) engaged in a “kickback” scheme to overcharge homeowners for force-placed insurance. Instead of purchasing the insurance on the open market at commercially reasonable rates, Wells Fargo referred all such business to ASIC or another insurance company, QBE Insurance Corp., who kicked back a portion of the premium to Wells Fargo disguised as a “commission.” Wells Fargo also charged borrowers for carrying out its insurance-related responsibilites, for which it had already been paid by the mortgage owner, such as Fannie Mae or Freddie Mac. As a result, homeowners were charged two to ten times the cost of regular insurance.

In a pivotal opinion, the Court denied the defendants’ motions to dismiss plaintiffs’ claim for violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”).

A different judge of the same Court upheld the sufficiency of RICO and other claims against ASIC, Ocwen Loan Servicing, and Litton Loan Servicing.

Wells Fargo Overdraft Litigation. I was part of the San Francisco trial team that obtained a $203 million judgment against Wells Fargo Bank for manipulating the order of processing debit card transactions to increase the number of overdraft fees imposed on its California accountholders. (Luckily, I walked away from a helicopter crash after an earlier hearing in the case.) The first and only such case to go to trial, it prompted a wave of nationwide settlements.

HSBC Overdraft Litigation. Himmelstein Law Network represented plaintiffs in a class action against HSBC Bank for manipulating the order of processing debit card transactions to increase the number of overdraft fees imposed on its checking account customers. The $32 million settlement was distributed to account holders.

Checking Account Overdraft Litigation. I was on the Plaintiffs’ Executive Committee in this multidistrict litigation proceeding involving more than 35 banks who manipulated the order of processing their customers’ debit card transactions to generate overdraft fees.

Wells Fargo Lifetime Free Checking Litigation. I negotiated a settlement on behalf of 164,000 customers of Wells Fargo Bank who had been promised lifetime free checking by other banks subsequently acquired by Wells Fargo.