Ninth Circuit Rules That The National Bank Act Preempts California's Unfair Competition Law

On March 9, 2010, the Ninth Circuit held that the National Bank Act ("NBA") preempts claims of "unfair" and "fraudulent" conduct in violation of state law. See Martinez v. Wells Fargo Home Mortgage, Inc., No. 07-17277 (9th Cir. March 9, 2010).

In Martinez, the plaintiffs alleged that Wells Fargo "unfairly" overcharged underwriting fees and tax service fees and "fraudulently" failed to disclose the "actual costs" of its services in connection with plaintiffs' refinance of their home mortgage loan. The plaintiffs brought a nationwide class action on behalf of "similarly situated home mortgage borrowers" against Wells Fargo for the violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200, et seq. and Section 8(b) of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2607(b). The district court dismissed the action and the Ninth Circuit affirmed.

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Published In: Antitrust & Trade Regulation Updates, General Business Updates, Conflict of Laws Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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