A Tuesday Morning Hodgepodge

November 19, 2019 at 9:46 am Leave a comment

Sorry I got this out a little late this morning, but there are a few things I wanted to give you a heads up on.

Implications of USAA Patent Suit Analyzed

A faithful blog reader sent me this article (subscription required) from American Banker analyzing the implications of USAA’s $200 million trial verdict against Wells Fargo for a violation of its remote deposit capture technology. The article points out that many institutions have to wait and see how this unfolds, but in the meantime, it is likely that once the judgment is finalized, banks and credit unions will be receiving not so friendly letters from USAA requesting licensing fees. The article also does a good job of outlining the history of this litigation which also has important implications for credit unions. Specifically, Mitek and USAA collaborated on developing RDC technology in the early 2000s, but when the relationship soured, the lawsuits started. In 2012, USAA and Mitek sued each other over their competing patent claims to RDC technology. This litigation was settled in 2014, but the parameters of that settlement are unclear at best, as USAA has sent licensing requests to credit unions and banks that thought they were covered under the settlement. We should all be gathering as much information about this case and its implications as we can. CUNA is hosting a free webinar to discuss the latest developments. By the way, I really appreciate the article my friend. But what are you doing texting out articles from American Banker at 11:00 PM?

Are Fair Lending Laws Going to be Scrutinized?

Steering, which refers to directing homebuyers to neighborhoods based on race and sex, is of course illegal for real estate agents. Unfortunately, Long Island Newsday has begun reporting on the results of an investigation into realtor steering practices, in which the paper employed testers of different races to see how they would be treated. The results raised the possibility of widespread steering, at least on the part of the agents tracked by Newsday. I’m bringing this article to your attention because it is the type of report that leads to hearings and legislation. As a result, even though Newsday’s reporting does not involve activities by lenders, you should all be prepared for scrutiny of your fair lending practices.

Will a Lack of Liquidity Trigger the Next Banking Crisis?

I like to say I am paid to be paranoid. I think that is also a good rule of thumb for those of you operating credit unions. After all, if history is any guide, the occasional financial shock is inevitable and we are just about due for one. So, this armchair economist wannabe is happy to report that, in its most recent financial stability report, the Federal Reserve paid special attention to signs that there is too little liquidity in the financial markets, a classic sign that investors sense that a tremor might be coming. Take a look at this graph produced by the Fed:

In addition, the Fed’s analysis is coming during a period of extraordinary intervention by the Fed in the short-term repossession or repo market, in which the Federal Reserve has had to step in and act as a buyer of short-term purchases which banks need for cash, and which private investors such as hedge funds typically view as a quick way of making some extra money off their bond holdings.

On that note, enjoy your day.

Entry filed under: Economy, Legal Watch, Mortgage Lending, technology. Tags: , , , , .

Secondary Capital and its Limits With USAA Patent Win, Mitek Litigation Takes Center Stage

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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