US Supreme Court Decisions On-Line | US Laws

§ 4010. —  Civil liability.

[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 12USC4010]

                       TITLE 12--BANKS AND BANKING
Sec. 4010. Civil liability

(a) Civil liability

    Except as otherwise provided in this section, any depository 
institution which fails to comply with any requirement imposed under 
this chapter or any regulation prescribed under this chapter with 
respect to any person other than another depository institution is 
liable to such person in an amount equal to the sum of--
        (1) any actual damage sustained by such person as a result of 
    the failure;
        (2)(A) in the case of an individual action, such additional 
    amount as the court may allow, except that the liability under this 
    subparagraph shall not be less than $100 nor greater than $1,000; or
        (B) in the case of a class action, such amount as the court may 
    allow, except that--
            (i) as to each member of the class, no minimum recovery 
        shall be applicable; and
            (ii) the total recovery under this subparagraph in any class 
        action or series of class actions arising out of the same 
        failure to comply by the same depository institution shall not 
        be more than the lesser of $500,000 or 1 percent of the net 
        worth of the depository institution involved; and

        (3) in the case of any successful action to enforce the 
    foregoing liability, the costs of the action, together with a 
    reasonable attorney's fee as determined by the court.

(b) Class action awards

    In determining the amount of any award in any class action, the 
court shall consider, among other relevant factors--
        (1) the amount of any actual damages awarded;
        (2) the frequency and persistence of failures of compliance;
        (3) the resources of the depository institution;
        (4) the number of persons adversely affected; and
        (5) the extent to which the failure of compliance was 

(c) Bona fide errors

                          (1) General rule

        A depository institution may not be held liable in any action 
    brought under this section for a violation of this chapter if the 
    depository institution demonstrates by a preponderance of the 
    evidence that the violation was not intentional and resulted from a 
    bona fide error, notwithstanding the maintenance of procedures 
    reasonably adapted to avoid any such error.

                            (2) Examples

        Examples of a bona fide error include clerical, calculation, 
    computer malfunction and programming, and printing errors, except 
    that an error of legal judgment with respect to a depository 
    institution's obligation under this chapter is not a bona fide 

(d) Jurisdiction

    Any action under this section may be brought in any United States 
district court, or in any other court of competent jurisdiction, within 
one year after the date of the occurrence of the violation involved.

(e) Reliance on Board rulings

    No provision of this section imposing any liability shall apply to 
any act done or omitted in good faith in conformity with any rule, 
regulation, or interpretation thereof by the Board of Governors of the 
Federal Reserve System, notwithstanding the fact that after such act or 
omission has occurred, such rule, regulation, or interpretation is 
amended, rescinded, or determined by judicial or other authority to be 
invalid for any reason.

(f) Authority to establish rules regarding losses and liability among 
        depository institutions

    The Board is authorized to impose on or allocate among depository 
institutions the risks of loss and liability in connection with any 
aspect of the payment system, including the receipt, payment, 
collection, or clearing of checks, and any related function of the 
payment system with respect to checks. Liability under this subsection 
shall not exceed the amount of the check giving rise to the loss or 
liability, and, where there is bad faith, other damages, if any, 
suffered as a proximate consequence of any act or omission giving rise 
to the loss or liability.

(Pub. L. 100-86, title VI, Sec. 611, Aug. 10, 1987, 101 Stat. 650.)

                             Effective Date

    Section effective Sept. 1, 1988, see section 613(b) of Pub. L. 100-
86, set out as a note under section 4001 of this title.