residential mortgage loan or open-ended consumer credit plan secured by the principal dwelling of terms requiring arbitration or any other nonjudicial procedure as the method for resolving any controversy or settling claims arising out of the transaction. This measure ensures that consumers retain the right to pursue legal action in court if necessary. By maintaining consumer access to judicial recourse, TILA reinforces critical consumer protection measures. See 12 CFR 1026.36(h)(1) § 1026.36 Prohibited acts or practices and certain requirements for credit secured by a dwelling. | Consumer Financial Protection Bureau (consumerfinance.gov). 2. Limitations on Servicemembers’ Legal Rights The Military Lending Act (MLA) generally prohibits terms in certain consumer credit contracts that require servicemembers and their dependents to waive the covered borrower’s right to legal recourse under any otherwise applicable provision of state or federal law, including any provision of SCRA. See 32 CFR part 232.8(b) eCFR :: 32 CFR 232.8 Limitations. If the Servicemembers Civil Relief Act (SCRA) applies, creditors may not compel arbitration. Additionally, the SCRA was amended to codify the unwaivable right of servicemembers to bring and participate in class actions, “notwithstanding any previous agreement to the contrary.” To view 50 USC 4042(a), scan the QR code. https://www.govinfo.gov/content/pkg/ USCODE-2022-title50/pdf/ USCODE-2022-title50-chap50- subchapVIII-sec4041.pdf 3. Restrictions on Remittance Transfer Consumer Claims Under the Electronic Fund Transfers Act (EFTA), remittance transfer providers are barred from limiting a consumer’s ability to seek damages or recover costs and attorney fees in disputes. Such limitations are in direct conflict with provisions found in sections 1693m(a)(3) and 1693(l) of the EFTA, which establish liability for providers and ensure that consumers have recourse to adequate remedies. This protection emphasizes the importance of holding remittance providers accountable for errors, delays or failures that can have significant financial repercussions for consumers. To view 15 USC 1693(m)(a)(3) and 1693(1), scan the QR code. https://www.govinfo.gov/content/pkg/ USCODE-2011-title15/pdf/USCODE-2011-title15- chap41-subchapVI.pdf MORE FACE TIME. LESS WAIT TIME. Visit NebraskaBlue.com/Telehealth to learn more. Health benefits that give you access to virtual visits with doctors and specialists, even if you’re out of state. So you can get the care you need — wherever you are, whenever you need it. An independent licensee of the Blue Cross and Blue Shield Association. 4. Disclaimers That Misrepresent Legal Obligations Contractual disclaimers such as “subject to applicable law” or “except where unenforceable” are insufficient to cure the inclusion of otherwise unlawful terms. The use of these disclaimers can mislead consumers into believing certain actions are permissible under some conditions when, in fact, they are not. Courts, including in Ruth v. Triumph Partnerships (577 F.3d 790, 801-02), have found such phrasing problematic, as it implies a conditional legality that is often legally unsupported. Banks must avoid using disclaimers that create an appearance of legality where none exists. Regular Compliance Reviews and Legal Counsel Involvement Given the complex and evolving regulatory landscape, banks are encouraged to conduct compliance reviews of their account agreements at least annually. Legal counsel should play a key role in this review process, as attorneys can provide expertise on current legal standards, identify potential issues with existing disclaimers and waivers, and recommend necessary updates to reflect new legal developments. Banks that proactively monitor agreements ensure terms and conditions uphold consumer protections and minimize legal risks. 28 NEBRASKA BANKER
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