Do Banks Have to Protect Your Money in Florida?

– In Florida, in order to state a cause of action for breach of fiduciary duty, there must be a fiduciary duty, a breach thereof, and resulting damages.
– Fiduciary relationships may be implied in law and are based on the specific factual situation and the relationship between the parties involved.
– In a banking context, the general relationship is that of a creditor to debtor, and the bank does not owe fiduciary responsibilities. However, in limited circumstances, Florida courts have found the existence of fiduciary relationships between borrowers and lenders. 1. Barnett Bank established a fiduciary relationship with a borrower after providing advice and extending a loan for an investment, leading to a duty owed to the borrower.
2. Motorcity of Jacksonville, Ltd. failed to establish a fiduciary relationship with the bank, as there was no evidence of dependency or voluntary assumption of duty by the bank. 1. Florida courts have held that oral promises made by a bank to a borrower can create a fiduciary relationship, even if not incorporated into the loan documents.
2. Failure to disclose material information known only to the lender can lead to claims of breach of fiduciary duty in Florida.
3. Once a fiduciary relationship is established in Florida, the fiduciary has a legal duty to disclose all essential or material facts pertinent to the transaction. – Special assets officers need to be cautious about the language and information they use during loan workouts with borrowers.
– Banks should provide borrowers with all relevant information to help them make informed decisions about their future lending needs.
– Banks should not encourage borrowers to rely on them as business partners during workouts, as this could lead to potential fiduciary duty claims.
– There is a fine line between supporting a customer in need and making promises that go beyond standard lender-borrower terms, potentially leading to a partnership with the borrower.

https://www.jimersonfirm.com/blog/2016/09/banks-owe-fiduciary-duty-florida/