In a surprising move, US Bank has made an offer to settle its claim against Sebastopol cobbler Michael Carnacchi. In a not-so-surprising move, Carnacchi has flatly refused the corporation's offer to completely erase his credit card debts, court and attorneys' fees, restore his good standing with credit rating agencies, and withdraw its lawsuit if he agrees to dismiss his cross-complaint.

As reported earlier in these pages ("David and Two Goliaths," Dec. 16, 2009), Carnacchi's credit—and life—was initially disrupted three years ago when he missed one payment and his rates were exorbitantly increased. Since then, he has fought both US Bank and Citibank corporations to change what he deems usurious practices.

Why turn down their offer? "US Bank vs. Carnacchi will only be dismissed if I sign a confidentiality agreement," Carnacchi says. "If someone asks, the most I could say is 'I settled.'" Carnacchi, who has represented himself in pro per in court, has decided to press on; his next court date is set for Sept. 3. With the assistance of newly hired counsel, Carnacchi is expanding his original cross complaint with an eye to a class action lawsuit. In addition to his previous claim, which cited the Eighth Amendment and the RICO Act as defense measures against the bank's credit lending practices, he now cites five more causes of action including usury, the violation of the U.S. Constitution's Fourteenth Amendment and fraud, among others.

In addition to rescission of his own contract plus his payments and interest, Carnacchi is asking for "calculation of, disgorgement of and redistribution of all profits illegally obtained by US Bank as a result of its unfair business practices," and the millions of dollars and all 33,000 shares of stock received by CEO Richard K. Davis during the government bailout to be redistributed to clients in similar straits with US Bank.

Ultimately, Carnacchi says he wants to pay what he owes to US Bank and Citibank. "I've never disputed the fact that I borrowed the money," Carnacchi underscores. "I'm saying that the contract by which I borrowed the money severely violates the law and that it is void ab initio, which means it was invalid from the outset, as if it never existed. I'm saying we need to draw up a new contract that doesn't violate the law. Then I'll repay the money."

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