Washington Court of Appeals Affirms Preemption of State Law Claims In Connection With Lending Practices


In McCurry v. Chevy Chase Bank, an appeal of a dismissal of a nationwide class action filed against Chevy Chase Bank, F.S.B., a three-judge panel of the Washington Court of Appeals, Division One, recently affirmed a ruling that “regulations issued by the federal Office of Thrift Supervision (“OTS”)…expressly preempt state statutes and judicial decisions that purport to regulate ‘loan related fees.’” In other words, federally licensed savings banks are subject only to OTS regulation regarding lending operations.

The McCurrys alleged that “Accumulated Fax Fees” and a “Notary Fee” assessed in paying off their home loan (1) was a breach of the deed of trust securing their loan, (2) unjustly enriched Chevy Chase, and (3) violated Washington’s Consumer Protection Act (“CPA”). On appeal, the McCurrys argued that these fees are not “loan related fees” as defined by 12 C.F.R. § 560.2 (preempting state regulations of “loan related fees”). The Court of Appeals, however, agreed with Chevy Chase, interpreting “loan related fees” to refer “precisely” to the fees at issue in this case.

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