Filter Results CategoriesCart
Highlight Updates

1.5.11.3 Deception, Disclosure, Debt Collection, and Discrimination

Claims primarily challenging deceptive conduct have withstood preemption challenges.244 However, state laws that impose notice or disclosure requirements beyond those required by federal law may be preempted.245 A court held that the National Bank Act preempts a state law that arguably required banks to produce signed receipts for all credit card purchases.246 The court concluded that this requirement substantially interfered with the bank’s exercise of its lending powers, as many consumers make purchases by phone or internet without signing anything.

Courts have found that state laws regulating debt collection issues arising out of bank accounts do not conflict with banks’ deposit-taking powers.247 This is consistent with OCC regulations that preserve debt collection as an area of general state law that is generally not preempted if it does not prevent or significantly interfere with the bank’s powers under the Barnett Bank standard.248

Discrimination claims are also not preempted.249

Footnotes

  • 244 {233} See Gutierrez v. Wells Fargo Bank, 704 F.3d 712 (9th Cir. 2012) (National Bank Act preempts claim that bank’s practice of processing transactions from high to low to increase overdraft fees was unfair, but not plaintiff’s claim that disclosures and representations were deceptive); Larin v. Bank of Am., 475 Fed. Appx. 121 (9th Cir. 2012) (claims under state law that bank affirmatively misrepresented value of its overdraft program not preempted); Lombino v. Bank of Am., N.C., 797 F. Supp. 2d (D. Nev. 2011) (state tort claims based on misrepresentation by bank that check had cleared not preempted); Kriegal v. Bank of Am., 2010 WL 3169579 (D. Mass. Aug. 10, 2010) (state laws that prohibit deceptive or fraudulent statements, as applied to certificates of deposit, do not conflict with federal banking regulations or TISA); Mwantembe v. TD Bank, 669 F. Supp. 2d 545 (E.D. Pa. 2009) (failure to disclose inactivity and dormancy fees on gift cards); Mann v. TD Bank, N.A, 2009 WL 3818128 (D.N.J. Nov. 12, 2009) (challenge to gift card advertising campaigns boasting that cards had “no fees” or were “free,” when there were dormancy and replacement fees). See generally National Consumer Law Center, Mortgage Lending §§ 5.8.4.3, 5.8.4.10 (3d ed. 2019), updated at www.nclc.org/library; National Consumer Law Center, Consumer Credit Regulation § 3.2.4.12.3 (2d ed. 2015), updated at www.nclc.org/library.

  • 245 {234} See, e.g., Robinson v. Bank of Am., 2011 WL 5870541 (C.D. Cal. Oct. 19, 2011) (federal law preempts claim that bank should have disclosed that fee on a payroll card could be avoided by withdrawing cash at teller window), aff’d, 525 Fed. Appx. 580 (9th Cir. 2013). See generally § 1.5.10.3, supra.

  • 246 McMullen v. Synchrony Bank, 300 F. Supp. 3d 292 (D.D.C. 2018).

  • 247 {235} Sacco v. Bank of Am., 2012 WL 6566681 (W.D.N.C. Dec. 17, 2012) (claim that bank’s debt collection harassment violated state law not preempted).

  • 248 {236} See 12 C.F.R. § 7.4007(c). But cf. OCC Interpretive Letter No. 1082, 2007 WL 5393636 (May 17, 2007) (banks’ practice of imposing overdraft fees and debiting those fees from depositors’ account is not an exercise of right to collect debts). See generally National Consumer Law Center, Fair Debt Collection § 10.1.2 (9th ed. 2018), updated at www.nclc.org/library.

  • 249 {237} 12 U.S.C. § 25b(j); Cuomo v. Clearing House Ass’n, L.L.C., 557 U.S. 519, 129 S. Ct. 2710, 174 L. Ed. 2d 464 (2009); Nemeth v. Citizens Fin. Grp., Inc., 2011 WL 2531200 (E.D. Mich. June 24, 2011) (claims under state law that bank employee was discriminated against based on her association with and advocacy for Arab-Americans not preempted); OCC Interpretive Letter. No. 998 (Mar. 9, 2004). See generally National Consumer Law Center, Mortgage Lending § 5.8.4.11 (3d ed. 2019), updated at www.nclc.org/library.