PNC Bank 2013 Annual Report Download - page 228

matter to the United States District Court for the Southern
District of Ohio.
In February 2014, a separate class action lawsuit (Montoya vs.
PNC Bank, N.A., et al., Case No. 1:14-cv-20474-JEM) was
filed in the United States District Court for the Southern
District of Florida against PNC Bank, ASIC and its parent,
Assurant, Inc. The allegations of the complaint are similar to
those found in the Lauren complaint. The plaintiff asserts
breach of contract by PNC, breach of its duty of good faith
and fair dealing, unjust enrichment, breach of a fiduciary duty,
and violations of the Florida Deceptive and Unfair Trade
Practices Act and federal TILA and RICO statutes. The
plaintiff seeks a nationwide class on all claims except the
Florida statutory claim, for which he seeks to certify a Florida
subclass. The plaintiff seeks, among other things, damages
(including treble damages), disgorgement of “unjust benefits,”
injunctive relief, interest and attorneys’ fees.
P ATENT I NFRINGEMENT L ITIGATION
In June 2013, a lawsuit (Intellectual Ventures I LLC and
Intellectual Ventures II LLC vs. PNC Financial Services
Group, Inc., and PNC Bank, NA, Case No. 2:13-cv-00740-
AJS) was filed in the United States District Court for the
Western District of Pennsylvania against PNC and PNC Bank
for patent infringement. The plaintiffs allege that multiple
systems by which PNC and PNC Bank provide online banking
services and other services via electronic means infringe five
patents owned by the plaintiffs. The plaintiffs seek, among
other things, a declaration that PNC and PNC Bank are
infringing each of the patents, damages for past and future
infringement, and attorneys’ fees. In July 2013, we filed an
Answer with Counterclaims, denying liability and seeking
declarations that the asserted patents are invalid and that PNC
has not infringed them. In November 2013, PNC filed
Covered Business Method/Post Grant Review petitions in the
U.S. Patent & Trademark Office (“PTO”) seeking to
invalidate all five of the patents. On December 6, 2013, the
court dismissed the plaintiff’s claims as to two of the patents
and entered a stay of the lawsuit pending the PTO’s
consideration of PNC’s review petitions, including any
appeals from decisions of the PTO.
M ORTGAGE R EPURCHASE L ITIGATION
In December 2013, Residential Funding Company, LLC
(“RFC”) filed a lawsuit in the United States District Court for
the District of Minnesota against PNC Bank, N.A., as alleged
successor in interest to National City Mortgage Co., NCMC
Newco, Inc., and North Central Financial Corporation
(Residential Funding Company, LLC v. PNC Bank, N.A., et al.
(Civil No. 13-3498- JRT-JSM)). In its complaint, RFC alleges
that PNC Bank (through predecessors) sold $6.5 billion worth
of residential mortgage loans to RFC during the timeframe at
issue (approximately May 2006 through September 2008), a
portion of which were allegedly materially defective, resulting
in damages and losses to RFC. RFC alleges that PNC Bank
breached representations and warranties made under seller
contracts in connection with these sales. The complaint asserts
claims for breach of contract and indemnification. RFC seeks,
among other things, monetary damages, costs, and attorney’s
fees.
O THER R EGULATORY AND G OVERNMENTAL I NQUIRIES
PNC is the subject of investigations, audits and other forms of
regulatory and governmental inquiry covering a broad range
of issues in our banking, securities and other financial services
businesses, in some cases as part of reviews of specified
activities at multiple industry participants. Over the last few
years, we have experienced an increase in regulatory and
governmental investigations, audits and other inquiries. Areas
of current regulatory or governmental inquiry with respect to
PNC include consumer financial protection, fair lending,
mortgage origination and servicing, mortgage-related
insurance and reinsurance, sales by third party providers of
voluntary identity protection services to PNC customers,
municipal finance activities, and participation in government
insurance or guarantee programs, some of which are described
below. These inquiries, including those described below, may
lead to administrative, civil or criminal proceedings, and
possibly result in remedies including fines, penalties,
restitution, or alterations in our business practices, and in
additional expenses and collateral costs.
• One area of significant regulatory and governmental
focus has been mortgage lending and servicing.
Numerous federal and state governmental, legislative
and regulatory authorities are investigating practices
in this area. PNC has received inquiries from, or is
the subject of investigations by, a broad range of
governmental, legislative and regulatory authorities
relating to our activities in this area and is
cooperating with these investigations and inquiries.
As a result of the number and range of authorities
conducting the investigations and inquiries, as well as
the nature of these types of investigations and
inquiries, among other factors, PNC cannot at this
time predict the ultimate overall cost to or effect on
PNC from potential governmental, legislative or
regulatory actions arising out of these investigations
and inquiries.
• In April 2011, as a result of a publicly-
disclosed interagency horizontal review of
residential mortgage servicing operations at
fourteen federally regulated mortgage
servicers, PNC entered into a consent order
with the Board of Governors of the Federal
Reserve System and PNC Bank entered into a
consent order with the Office of the
Comptroller of the Currency. Collectively,
these consent orders describe certain
foreclosure-related practices and controls that
the regulators found to be deficient and require
PNC and PNC Bank to, among other things,
develop and implement plans and programs to
enhance PNC’s residential mortgage servicing
210 The PNC Financial Services Group, Inc. – Form 10-K