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Suit filed against ANZ Bank alleging 'Truth in Lending' violations

[SN file photo]
Two of the plaintiffs have been overcharged interest of more than $6K

Pago Pago, AMERICAN SAMOA — Three American Samoa residents have filed a civil lawsuit at the federal court in Guam, against ANZ Guam Inc., the parent company of ANZ Amerika Samoa Bank in Pago Pago.

Filed Mar. 21 (which is Mar. 20 in American Samoa), the lawsuit identifies the plaintiffs as Ronald Parker, Fa’afetai Parker and Tualagi Gaoteote, on behalf of themselves and all other similiarly situated.

According to the suit, the defendant is wholly owned by one of the largest financial institutions in the world, Australia and New Zealand Banking Group Limited.

The complaint alleges that ANZ is liable for its systematic violations of the Truth in Lending Act  (TILA) of 1968, for failing to provide homeowners with accurate periodic statements regarding the mortgages it services. Violations cited are:

•     Systemic violation of TILA for failing to provide adequate notice to homeowners when it changes the interest rates for its adjustable rate mortgages (ARM);

•     systemic breach of the mortgage contracts it services when it charges excessive late charges for incomplete payments;

•     unjust enrichment from improperly notifying borrowers of the changes in the interest rates and charging excessive late fees; and

•     breach of the covenant of good faith and fair dealing related to servicing residential mortgages.

The complaint notes that residents of American Samoa are a captive market with very limited banking options, and ANZ and its predecessors have acted as the sole residential mortgage lender in American Samoa for years.

Plaintiffs allege that each of them have mortgages on their homes in American Samoa that were originated, are owned, and have been serviced continuously by ANZ or its predecessors.

When the Plaintiffs submit their monthly payments of principal and interest to the Bank, the Bank fails to provide them with basic information about their debt in return, the complaint alleges.

“Specifically, the Bank does not provide Plaintiffs with a simple periodic bank statement that shows, for example, how much they currently owe, how much they have recently paid, and how much they will soon owe if they do not make a timely payment,” the lawsuit notes.

Not only do TILA and its Regulation Z detail the information that must be given to homeowners in a monthly statement but the US Consumer Financial Protection Bureau repeatedly emphasizes how important it is for mortgage services to provide this information in a clear and understandable manner, the suit alleges.

It also states that both the Parkers and Gaoteote have been unable to properly understand what they owe and how their payments have been applied or calculated — and even why they have been charged late fees — because of ANZ’s failure to provide a proper monthly statement.

The suit notes that the Plaintiffs’ mortgages are ARMs whose interest rates reset once a year. In order to protect borrowers, TILA also requires a mortgage servicer to provide important information to homeowners about these rate changes at least 60 days before a change is effective. These requirements allow borrowers to adjust their finances to the actual amount of the increase in their mortgage payments.

“However, ANZ repeatedly informs the Plaintiffs of their increased rate and interest payment weeks short of the 60 day requirement, and provides surprisingly little information to Plaintiffs about the index underlying the interest rate,” the complaint says.

“This lack of information has compounded the confusion and frustrations that the Plaintiffs have faced trying to monitor their mortgage payments, particularly since the Bank recently confirmed that it had miscalculated the Parkers’ interest payments for years, overcharging them more than $6,000,” it says. (See tomorrow’s edition for more details)