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TCH and Chamber of Commerce File Amicus in Ex Rel. Bishop and Kraus v. Wells Fargo

Jul 20, 2017

The Clearing House (TCH) and the Chamber of Commerce filed a joint amicus brief in a case involving the False Claims Act (FCA). The underlying litigation concerns Wachovia Bank’s participation in the Federal Reserve’s Discount Window lending program during the financial crisis. A commercial real estate loan group at Wachovia is alleged to have engaged in improper loan origination activities and accounting practices from approximately 2003 through 2005 that caused an unspecified material negative effect on Wachovia’s finances, which resulted in Wachovia’s (and later Wells Fargo’s) submitting false claims every time it received an advance from the Discount Window Program from August 2007 to June 2009 because the commercial loan group’s conduct and alleged control fraud made the banks improper recipients of the short-term advances at favorable rates.  Amici make two arguments: (i) application of the FCA based on generic certifications has the potential to disrupt the Fed’s authority to manage monetary policy and maintain financial stability; and (ii) claims based on generic certifications of compliance with all laws should fail at the pleadings stage.

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