The California lower courts have not been friendly toward national banks’ claims of preemption. That may change. On June 21, the California Supreme Court held in a unanimous opinion that the National Bank Act preempts California’s statute that specifies detailed disclosure rules for “convenience checks.” Parks v. MBNA America Bank, N.A., S183703 (June 21, 2012). The decision avoids what would have been an unseemly split with the Ninth Circuit over the same issue, and the breadth of the decision means it cannot be limited just to “convenience” checks. Parks could result in the preemption of other state and local rules that “significantly impair the exercise of authority” granted to national banks.
PARKS BACKGROUND
Facts. Allan Parks filed a putative class action alleging that MBNA failed to include on its “convenience check” loan offers all of the disclosures required by Section 1748.9 of the California Civil Code. Section 1748.9 required a “credit card issuer” that extends credit through convenience checks to include “on the front of an attachment that is affixed by perforation or other means to the preprinted check or draft, in clear and conspicuous language” specific detailed disclosures. Cal. Civ. Code § 1748.9. The plaintiff alleged that MBNA’s failure to provide those disclosures amounted to “unlawful” conduct under California’s unfair competition law (Cal. Bus. & Prof. Code § 17200).
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