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1st Circuit Cases You May Have Missed

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By William Vogeler, Esq. on April 22, 2019 9:00 AM

From municipal bonds to telephone regulations, the U.S. First Court of Appeals has heard about them all in recent months.

But one case stands out for its impact on the average American's bank account: Fawcett v. Citizens Bank. This class-action pitted the everyday customer against a bank in arguments about overdraft fees.

The plaintiffs alleged the bank charged usurious interest fees for overdrawn checking accounts. The appeals court said that's not interest, that's just business.

Here are three new cases from the First Circuit, where it is business as usual:

1. 'Sustained Overdraft Fees'

The National Bank Act governs the issue, the appeals court explained. The Act allows banks to charge interest, but doesn't define it. But if bank charges are not "interest," then federal regulations apply as "deposit account service charges." In this case, the First Circuit said the bank's "sustained overdraft fees" were not interest.

2. Puerto Rico Bankruptcy

On the other side of another coin, the appeals court ruled in a case related to Puerto Rico's bankruptcy. The issue was about the payment of municipal bonds backed by specific revenues.

The First Circuit said that municipalities are not required to make payments on debt secured by special revenues during bankruptcy proceedings. They may voluntarily make payments, but they are not legally obliged.

3. ATDS, Is That You?

You may not care enough about ATDS to look it up. But if you knew we were talking about robo-calls, you might.

The Federal Communications Commission defines "Automatic Telephone Dialing Systems" as automated systems that don't require human intervention. But federal courts,now  including the First Circuit, have expanded the definition to say: "an ATDS need only be able to make calls from a stored list of telephone numbers."

So yeah, it's technical issue. But that's what call blocking is for. Unfortunately, you can't block those overdraft fees.

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