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Reg Z Prohibition against mandoatory arbitration and waivers

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  • #2584
    Marcella
    Participant

    We use an error and omission agreement. The jest of the agreement is that the customer agrees to cooperate with the bank in correcting “errors” if they occur. It also states, “failure by the party to initial or execute such documents as and when requested hereunder shall constitute a breach of the contractual agreement evidenced here by and shall also constitute a default under the note evidencing mortgage, deed of trust, security agreement or other security instrument securing the loan.”

    Could this be viewed or interpreted to bar a customer from bringing a claim?

    thanks

    #3159
    JGo9
    Participant

    Marcella,

    In my opinion, it would not be interpreted to bar a customer from bringing a claim. That being said this might be something for legal counsel to review.

    I’d love to get some more opinions on this.

    #3152
    Marcella
    Participant

    I’m not understanding what verbiage constitutes Mandatory arbitration and waivers. the following statement is in our notes: Jury waiver. We and you hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought either us or you against the other. I don’t think this fits, but I’m not sure.

    Thanks

    #3580
    sgilreath
    Participant

    The title Insurance Company provides a Deletion of Arbitration Provision disclosure at closing that states, “Your policy contains an arbitration provision. It allows you or the Company to require abitration if the amount of insurance is $2,000,000 or less. If you want to retain your right to sue the Company in case of a dispute over a claim, you msut request deletion of the arbitration provision before the policy is issued.”

    I don’t believe the language in this disclosure pertains to the Prohibition on Mandatory Arbitration since this document is not a part of the bank’s contract or agreement. I’m looking for confirmation or opinions.

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