American Bankers Association et al. v. Lockyer et al.

Group of national banks and trade associations

One of the firm's major victories for federally chartered financial institutions was in American Bankers Association v. Lockyer, 239 F. Supp. 2d 1000 (E.D. Cal. 2002). Our attorneys brought the action on behalf of a broad group of national banks and trade associations, seeking declaratory and injunctive relief against the enforcement of a California law regulating the terms of credit card lending, Cal. Civ. Code § 1748.13. Based in part upon evidence showing that compliance with the statute would impose enormous costs on financial institutions, cause some to raise substantially their required minimum monthly payments for credit card accounts, and cause other credit card issuers to cease doing business entirely with California consumers, the court concluded that the state statute, although touted by the State as a consumer disclosure law, was preempted by the NBA, the HOLA and the Federal Credit Union Act and by the regulations promulgated thereunder. The defendants initially appealed the district court's ruling in the Ninth Circuit, but, apparently recognizing the dubious outlook for success, withdrew that appeal, leaving the district court's ruling undisturbed.

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