Federal Reserve Recommends Consumers Contact an Attorney to Resolve Contract Disputes With Banks

The Federal Reserve, on its Website, says that although it does regulate banks, and will look into every complaint it receives from consumers regarding the banks it regulates, it does not have the authority to resolve every type of problem.

Disputes over contracts, undocumented factual disputes between a consumer and a bank, matters that are the subject of a pending law suit, complaints about customer service, or disagreements over a specific bank policy or procedure not addressed by federal law or regulation… as examples, are all outside the Fed’s authority as far as obtaining a resolution is concerned.

In those instances, where the Fed’s authority does not allow it to resolve matters, the Federal Reserve recommends that consumers contact an attorney.

So, what is a loan modification?

It’s an attempt to renegotiate and amend a legally binding contract, which if successful will produce an addendum to that contract.

Call me crazy, but that sounds dangerously close to being considered “contract law” to me.

I’ve got it now… so, the Federal Reserve recommends that consumers contact an attorney when involved in contract disputes with banks, but the California legislature is about to pass a law saying that lawyers can’t charge a client a fair retainer when taking on such clients, which will effectively eliminate a consumer’s ability to retain legal counsel?

Do I have that right, or am I missing something?

Nope, I think I’ve got a handle on things here… and it’s embarrassing for our government on a scale I’ve never even contemplated before.


Write to your elected representative and tell him or her that you want to be able to hire an attorney when you want to hire an attorney.

And since the Federal Reserve recommends doing so when engaged in a contract dispute with a bank… which is another way to describe a loan modification… perhaps SB 94 creates a much larger problem than it attempts to fix.

And, if you’re an attorney, write to the California Bar Association.  Tell them not to support SB 94.

Enforce the existing laws and put anyone scamming homeowners in jail.  It’s already illegal to defraud a homeowner out of thousands of dollars.  All SB 94 will accomplish is to take the legitimate and reputable law firms out of the business of helping consumers negotiate with banks.

The banks will love it, I’m sure.  But that’s a pretty good reason why it shouldn’t pass, don’t you think?

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