National Bank Act

News & Analysis as of

Valid at Inception Rule Shot Down by the Second Circuit

Marketplace lenders and investors that purchase interests in loans originated by banks should pay close attention as it could spawn a host of class action lawsuits if left standing. In a controversial opinion decided on...more

NBA Doesn’t Preempt State Usury Claims Against Assignee of National Bank, Second Circuit Rule

Why it matters - In a potentially troubling ruling, the Second Circuit Court of Appeals refused to find the National Bank Act (NBA) preempted state law usury claims against an assignee of a national bank. In a putative...more

Second Circuit Decision Could Disrupt Secondary Market for Bank-Originated Loans

A May 22, 2015 decision by the U.S. Court of Appeals for the Second Circuit appears to disturb the generally settled body of law concerning the status of non-bank investors with respect to applicable usury laws for...more

Second Circuit Declines To Allow National Bank Preemption by Assignee of National Bank

A national bank can charge an interest rate that exceeds state law maximums, but the bank’s assignee cannot, the U.S. Court of Appeals for the Second Circuit ruled recently, in a decision that could impact the ability of debt...more

Special Alert: Second Circuit Decision Threatens To Upset Secondary Credit Markets

The Second Circuit Court of Appeals’ recent decision in Madden v. Midland Funding, LLC held that a nonbank entity taking assignment of debts originated by a national bank is not entitled to protection under the National Bank...more

Financial Services Weekly News Roundup - June 2015 #2

Regulatory Developments: SEC Chair Highlights Recent Accomplishments - In a June 4, 2015 speech, SEC Chair Mary Jo White highlighted recent activities of the SEC and identified work to be done in the near future....more

Second Circuit Holds Application of State Usury Laws to Third-Party Debt Purchasers Not Preempted by National Bank Act

On May 22, 2015, in Madden v. Midland Funding, LLC (“Madden”), the United States Court of Appeals for the Second Circuit held that the application of state usury laws to third-party assignees is not preempted by the National...more

Second Circuit Holds That National Bank Act Preemption Does Not Apply to an Independent, Third-Party Debt Collector That Purchased...

The Second Circuit recently issued a National Bank Act preemption decision with significant implications for purchasers of loans and other debt from national banks. See Madden v. Midland Funding, LLC, --- F.3d ---, 2015 WL...more

2nd Circuit Reinstates Consumer Class Action Against National Debt Buyer Through Preemption Decision

On May 22, the U.S. Court of Appeals for the Second Circuit ruled against a debt collection firm, holding that “non-national bank entities are not entitled to protections under the National Bank Act (“NBA”) from state-law...more

Second Circuit Ruling Undermines National Bank Act Preemption of State Usury Laws for Loans Transferred to Non-Banks

The U.S. Court of Appeals for the Second Circuit ruled last week that a purchaser of charged-off debts from a national bank was not entitled to assert the preemption of state usury laws available to national banks under...more

No “Pleasure” for Florida Whistleblower

Despite 14 pages of vigorous dissent, a majority of a three-judge panel of the Eleventh Circuit has done the right thing and joined the Fourth, Sixth and Ninth Circuits in holding that the National Bank Act (“NBA”) preempts...more

International Bank to Pay $30 Million to Resolve Overdraft Fee Allegations

On March 2, an international bank agreed to pay $30 million to settle allegations that it changed the order in which customers’ debit transactions cleared in order to generate additional overdraft fees. According to the...more

Large National Bank Fights Against Latest Suit Alleging Improper Overdraft Fees

On January 6, a large national bank filed a motion to dismiss a suit alleging it charged improper overdraft fees. Filed last year in the Central District of California, the suit claims the bank violated federal and state laws...more

Ninth Circuit: AG’s Suit Challenging Add-On Products Stays in State Court

Lawsuits filed by the Hawaii Attorney General alleging that card issuers deceptively advertised add-on products belong in state court – and are not preempted by the National Bank Act (NBA), the Ninth U.S. Circuit Court of...more

Supreme Court Seeks Federal Government Opinion on National Bank Act Preemption of State Foreclosure Law

Considering a petition for certiorari filed by Federal National Mortgage Association in a case concerning which state’s law governs a national bank’s authority to serve as trustee under a deed of trust—the state in which the...more

New Prepaid Payment and Promotional Product Regulations in Canada

On May 1, 2014, Canada’s Prepaid Payment Products Regulations came into force. The new regulations apply to all prepaid payment products and promotional products, whether physical or electronic, issued in Canada by federally...more

Financial Services Law -- Nov 21, 2013

Bank Can Be Liable Under California Law for Overdraft Fee Charge Ordering - A checking account that includes a debit card feature is a “service” under California’s Consumer Legal Remedies Act, according to a new...more

Ninth Circuit Affirms Preemption Of State Law Claims Asserting National Bank Mislead Consumers By Failing To Make Material...

On May 22, the U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s holding that the National Bank Act (NBA) preempts state disclosure requirements on a bank’s deposit-related activities. Robinson v. Bank...more

Ninth Circuit Affirms Dismissal Of Unfair Competition Claims Over Teaser Rates

On January 9, the U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s dismissal of a putative class action against a national bank over its adjustable rate mortgage disclosure and payment application....more

California Federal District Court Holds Force-Placed Insurance Claims Not Preempted By National Bank Act

On December 11, the U.S. District Court for the Northern District of California refused to preempt under the National Bank Act claims that a mortgage lender breached its contract by force-placing a backdated flood insurance...more

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