U.S. Bank Class Action Challenges Pay-to-Pay Fees

A class action lawsuit (Casper vs. US Bank) challenges U.S. Bank’s “Pay-to-Pay” fees, charged to borrowers when they make a mortgage payment by phone or online.

The U.S. Bank class action lawsuit was filed by Theodore Casper, who says that in May 2014 Casper purchased a home in New York, for which he secured a mortgage.

Casper says he took out the loan from Paragon Home Loans Inc., and U.S. Bank acquired the servicing rights for the mortgage. 

The plaintiff states that he made monthly mortgage payments online using a debit card throughout the term of his mortgage, and says that he paid on time.

Allegedly, Casper was charged an additional Pay-to-Pay fee every time he made his mortgage payment online. Allegedly, this fee was $3.50 until June 2, 2016, at which point it was increased to $5.

According to the Casper vs. US Bank class action lawsuit, this fee is a breach of the mortgage agreement because the agreement does not delineate the Pay-to-Pay fees as “one of the many charges that the lender, or loan servicer acting on behalf of the lender,” may charge.

Casper asserts that “there is simply no provision in the mortgage that allows U.S. Bank to collect Pay-to-Pay fees.” He goes on to argue that this practice violates federal debt collection law, which prohibits the collection of any amount incidental to the principle obligation unless that amount is expressly stated in the loan agreement.

The U.S. Bank class action lawsuit states that New York federal courts have also agreed that these processing fees are illegal if they are not expressly identified in the loan agreement.

The mortgage processing fees class action lawsuit further claims that U.S. Bank charges these fees for its own profit.

Allegedly, it costs the bank far less than $5 to process online payments, and U.S. Bank pockets the difference between the actual cost of processing the payment and the fee that they charge.
Casper says that he and many other U.S. Bank customers were subjected to this fee, and were financially injured because of it.

The plaintiff seeks damages on behalf of himself and all other similarly affected U.S. Bank mortgage borrowers in New York.

Casper is represented by Theodoros Basdekis of Scarzafava Basdekis & Dadey PLLC; James L. Kauffman of Bailey Glasser LLP; and Hassan A. Zavareei and Katherine M. Aizpuru of Tycko & Zavareei LLP.

The U.S. Bank Mortgage Processing Fees Class Action Lawsuit is Casper vs. US Bank, Case No. 5:19-cv-00850-TJM-TWD, in the U.S. District Court for the Northern District of New York.

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