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Spring 2013

Are We Dealing with an Unhappy Customer or Online Defamer?

By Whitney C. Gibson

It’s Monday morning. As you’re grabbing a cup of coffee, your cell phone rings. It’s one of your fellow executives who asks if you have seen what’s being said online about your bank. You hadn’t, but you rush to your computer. Your inbox has become full of Google alerts related to your bank. In a typical month, you see a handful of these alerts. This morning, you see 10. As you scan the emails, you’re shocked. There are a number of horribly negative reviews. You quickly search online to find two blogs that have been created to slam your bank. In addition, there are a dozen negative reviews posted on the popular Rip-Off Report website. The worst part? These blogs now appear just below the company’s main website in Google search results.

The complaints immediately make you question their validity. One reviewer said that a bank teller stole his identity by using the personal information he provided to open a checking account. You would have known about that, and you’ve heard nothing. Another said the bank charged overdraft fees when accounts were in good standing and refused to reallocate the funds. You know these accusations are false. The problem is there are many more and they are all posted by a variety of anonymous screen names. The same posts are being picked up and replicated by other sites. You are clearly being attacked.  Read more.

Employer Pay-or-Play Penalties

By Linda R. Mendel

If your bank offers group health coverage to employees, you know that the Affordable Care Act (commonly known as "Obamacare") has impacted the design of your group health plan. For example, coverage is now available to employees' adult children (up to age 26), lifetime limits on benefits are being phased out, and preventive services are covered with no employee cost-sharing. This article is intended to help you understand that the next phase of health care reform has implications beyond group health plan design; the tax penalties going into effect in 2014 may be a factor in decisions you make about your workforce. Read more.

Recent Trial Victory Provides Important Guidance for Ohio Trustees

By Lisa Babish Forbes and Elizabeth E.W. Weinewuth

A recent trial victory on behalf of a major banking client clarifies three key points of law in Ohio fiduciary litigation. A Vorys trial team successfully defended a bank trustee against numerous breach of fiduciary duty claims brought by successor trustees and beneficiaries, resulting in a defense verdict on all 13 claims. The decision provides critical interpretation of the Ohio Trust Code on issues of the applicable standard of proof, the enforceability of trust language that limits the liability of trustees, and statutes of limitations applicable to breach of fiduciary duty claims. Read more.

CFPB's Qualified Mortgage Rules

By Jeffery E. Smith

Earlier this year, the Consumer Financial Protection Bureau (CFPB) issued a number of mortgage-related rules, including its long-awaited qualified mortgage (QM) rules in an 804-page set of complex guidelines for residential real estate lending mandated by the Dodd-Frank Act. The rules take effect in January 2014.

The QM rules are intended by the CFPB to address many of the mortgage lending practices that played a part in the housing "bubble" issues leading to the "mortgage crisis," and to create a bright-line limited "safe harbor" standard for certain residential mortgage lending activities. They will require extensive lender documentation relating to a borrower's ability to repay, which is intended to address some of the low-and-no-doc loans that abounded in the heyday of the "bubble." QM standards will bar such practices as interest-only and negative-amortization mortgage loans, as well as loans with a maturity in excess of 30 years. Bank and thrift institutions have routinely incorporated many of these and other types of credit and "ability to pay" safeguards in their processes and procedures, including analyzing for the prospective impact of increased rates on adjustable rate mortgages, so some of the QM rules may seem old hat to bank and thrift lenders. Read more.

If you have an idea for an article you would like us to pursue, please contact your Vorys attorney. We hope you enjoy the read.

About the Vorys Banking Group

Our nearly 20 lawyers dedicated to our banking practice have hundreds of years of combined practical, hands-on experience in the industry. We have been named a "Top Lead Legal Advisor" by American Banker magazine, and a Go-To Law Firm® in banking and finance, securities and corporate transactions by Fortune 500 general counsel. We represent public and non-public institutions, from community banks and thrifts to large, multinational financial institutions throughout the United States. Our clients have been in Ohio, Washington, D.C., Maryland, Virginia, Arizona, Florida, Indiana, Michigan, Kentucky, Missouri, New York, North Carolina, South Carolina and West Virginia. Our team includes two former general counsels for major bank holding companies; their insight has been invaluable to our clients. We assist our clients with bank, thrift and holding company formations; securities law compliance; board governance; enforcement actions with state and federal agencies; M&A and divestitures; capitalization, recapitalization and private equity transactions; employment law matters; executive compensation and benefit plans; tax matters; and the negotiation of all types of contracts. We also represent financial institutions, other institutional lenders and borrowers in all types of complex commercial financings.



Aaron S. Berke

Elizabeth Turrell Farrar

Jason L. Hodges

Michael D. Martz

Kimberly J. Schaefer

Jeffery E. Smith

J. Bret Treier

Anthony D. Weis


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