By Chris Bruce
Wells Fargo may not have to face a U.S. Supreme Court test on its compliance with a federal law that protects borrowers who serve in the U.S. military.
Wells Fargo and the plaintiff in the case, Richard Sibert, Dec. 21 jointly asked the justices to dismiss a petition that Sibert filed in October. He asked the Supreme Court to review a federal appeals court ruling under the Servicemembers Civil Relief Act, a statute law that’s been a frequent basis for enforcement action by the Consumer Financial Protection Bureau and the Department of Justice in recent years.
The SCRA gives servicemembers special protections, including a requirement for lenders to obtain a court order before foreclosing on or selling their property, if the loan was originated “before the period of the servicemember’s military service.” Sibert’s case is unusual because he had several different periods of military service, making the case a potential test on how to apply the “before the period of the servicemember’s military service” language. Sibert said a Wells Fargo foreclosure violated the statute, but Wells Fargo said he’s not covered under the law because he was already in the Navy when the loan was made.
The justices haven’t yet ruled on the joint motion for dismissal, and aren’t bound by it. However, the joint filing makes further action in the case unlikely.
The CFPB and the Justice Department have frequently brought enforcement actions under the SCRA. In November, the Justice Department said it obtained an additional $5.4 million in relief for servicemembers in connection with previous claims of unlawful auto repossession by a Wells Fargo affiliate. Relief in that case could eventually total more than $10 million. However, the issues in that case aren’t at issue in the petition that Sibert filed in October.
Sibert is represented by John D. Hafemann of Military Justice Attorneys in Savannah. Wells Fargo is represented by Neal Kumar Katyal of Hogan Lovells in Washington.
Case: Sibert v. Wells Fargo Bank N.A., U.S., 17-cv-00566, motion for voluntary dismissal 12/21/1