If one class action lawsuit wasn't enough for Chevy Chase Bank, they're potentially facing another one. Last summer, Chevy Chase Bank finally settled a 7 year lawsuit over the credit card business for $16.1M plus other damages. The lawsuit created an entire "society" against Chevy Chase Bank, made headline news and gave their reputation quite a hit.
Now, Chevy Chase Bank possibly faces another class-action lawsuit after a Wisconsin couple won a judgement stating that they were deceived over the terms of their mortgage and that Chevy Chase Bank violated the Truth In Lending Act (TILA). Not only did the judge rule in favor of the Wisconsin couple, the judge ordered Chevy Chase Bank to rescind the loan and certified the lawsuit as class-action. This opened the case to other borrowers who felt misled.
Unfortunately, a ruling earlier this year by an appeals court in Boston cast doubt on whether class-action lawsuits will be allowed in mortgage recission cases. The court said that rescissions didn't apply in class-action lawsuits because "it is a strictly personal matter".
In addition to the Boston appeals court ruling, Congress limited TILA violation judgments to a maximum of $500,000 total. This is a drop in the bucket compared to the kind of sums a class-action lawsuit would generate.
Though it may be an uphill battle, there may still be some light at the end of the tunnel for consumers. Whatever the outcome, it will be another shot to Chevy Chase Bank's reputation and pocket book. And it will certainly keep a lot of lawyers busy and well fed.