On Compliance: Lessons for credit unions from the USAA-Wells Fargo RDC case

One is that best way to approach the review and negotiation a vendor agreement is to insist that it be provided at the outset.

Does $300 million in damages get your attention?

That’s the total damages assessed against Wells Fargo by two separate Texas juries in two separate actions brought by USAA. These two actions alleged that Wells Fargo had willfully infringed on USAA’s remote deposit capture technology patents.

Since early 2018, many credit unions started receiving demand letters from USAA, claiming that these credit unions’ RDC technology infringed on patents owned by USAA. Sent by a law firm representing USAA, the letters sought fees and licensing agreements for the continued use of the RDC technology by the credit union.

The RDC technology most, if not all, of the credit unions were using was being provided through various vendors. Most credit unions immediately reached out to their respective vendors to attempt to resolve the claim. While this is the right approach for a credit union that finds itself in such a predicament, it can also be a time for angst if the credit union has not taken proper care in negotiating the vendor agreement at the inception of the relationship.


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