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Valley Nat'l Bank v. Lavecchia (D.N.J.)

Case Conclusion Date: 08.13.1999

Practice Area: Litigation

Outcome: Summary judgment and permanent injunction awarded

Description: From TitleEsq: On July 13, 1999, Valley National Bank, a wholly- owned subsidiary of Valley National Bancorp, reported that it had acquired the assets of Commonwealth Land Title insurance Company's Totowa, New Jersey office and will immediately begin selling title insurance through Valley's Branch office located in Riverdale, NJ. The new title agency is a separate subsidiary of VNB known as Wayne Title, Inc. and will conduct business under the trade name of Commonwealth All Service Title Agency. You might have thought that Banks were prohibited from selling title insurance. They were under NJSA 17: 46B-30.1, which prohibits lenders from owning or controlling title insurance companies. Valley National Bank applied for a title producer's license for Wayne Title, Inc. based on an interpretation of 12 U.S.C. Sec. 92, permitting national banks to sell insurance in towns having a population of 5,000 or less. In Barnet Bank vs. Nelson, 517 U.S. 25 ( 1996), the United States Supreme Court used this section to permit national banks to sell title insurance even though it was prohibited by Florida State law. After the initial denial of their license, VNB instituted an action to compel the issuance of same by the NJ Department of Insurance. In Valley National Bank v. LaVecchia, the New Jersey Courts agreed and issued an order prohibiting the Commissioner of Banking and Insurance from denying the license application because Wayne Title is a subsidiary of VNB.

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