Second Circuit Holds That One-Year Limitations Period Imposed by Bank for Bringing a Claim Was Reasonable

The United States Court of Appeals for the Second Circuit recently issued a summary order affirming a lower court’s decision to dismiss a bank customer’s complaint as untimely because the bank’s terms and conditions governing the account imposed a one-year limitations period on any claims.  See Wechsler v. HSBC Bank USA, N.A., 2017 WL 66586 (2d Cir. Jan. 6, 2017).  There, the plaintiff opened a savings account with a bank that was eventually purchased by the defendant.  Beginning in January 2014, the defendant began charging maintenance fees on accounts with balances below $500.00, including on the plaintiff’s account.  In July 2015, the plaintiff filed this action, alleging that the defendant had breached its contract and engaged in deceptive practices in violation of the New York Deceptive Practices Act.  The defendant moved to dismiss, claiming that the action was time-barred.  Specifically, the Rules for Deposit Accounts which governed the account at issue state that any action regarding the defendant’s handling of an account must be brought “within one (1) year of the date the problem occurred” as well as that “if the problem involves a series of events, such as a number of forgeries over a period of time, then the date the first event occurred shall be the date by which the period to make any claim or bring any legal action shall begin to run.”  The plaintiff argued that the limitations period was unreasonable and should not apply and, if it did apply, the period should not begin to run when the first fee was charged because the plaintiff did not realize the fees were “a series of events” as defined in the Rules for Deposit Accounts until another fee was charged months later.  The district court agreed with the defendant and dismissed the action, finding that the plaintiff needed to file the complaint within one year of the first fee.  On appeal, the Second Circuit affirmed.  It held that nothing prevented the plaintiff from filing his complaint within the limitations period and there were no “unique circumstance in this case that would defeat the normal rule that one-year limitation periods are reasonable.”  The Court further found no merit in plaintiff’s argument that the “series of events” as defined in the Rules for Deposit Accounts did not begin until later fees were charged.

For a copy of the decision, please contact Michael O’Donnell at or Michael Crowley at