In Cohen v. Capital One Funding, LLC, the federal district court for the Eastern District of New York joined the federal district court for the Western District of New York in Petersen v. Chase Card Funding, LLC in holding that the National Bank Act (NBA) preempts claims that the interest charged on credit card receivables assigned to affiliated securitization trusts violated New York usury law.… Continue Reading
preemption
NY federal district court holds NBA preempts application of state usury law to securitized credit card receivables
By Ballard CFS Group on
A New York federal district court in Petersen v. Chase Card Funding, LLC held that the National Bank Act (NBA) preempted the plaintiff’s claims that the interest charged on his credit card account violated New York usury law.
The named plaintiff was the holder of a credit card issued by JPMorgan Chase Bank, N.A.… Continue Reading
Third Circuit rules CFPB lawsuit against federal student loan servicer did not preclude PA AG’s parallel lawsuit, federal law did not preempt PA UDAP claims
By John L. Culhane, Jr. & Thomas Burke on
Posted in State Enforcement, Student Loans
The U.S. Court of Appeals for the Third Circuit ruled last week in Commonwealth of Pennsylvania v. Navient Corp. that the PA Attorney General could bring a parallel enforcement action against Navient, a servicer of federal student loans, under the Consumer Financial Protection Act (CFPA) even though the CFPB had previously filed a lawsuit against Navient based on the same alleged conduct. … Continue Reading
FAA Preemption Petitions Now Ripe for SCOTUS Conference
By Alan S. Kaplinsky on
Posted in Arbitration, Litigation and Court Decisions
Briefing is now complete on the petitions for certiorari in the Blair v. Rent-A-Center appeals that could produce the next blockbuster U.S. Supreme Court arbitration decision. At issue is whether the Federal Arbitration Act (FAA) preempts California’s McGill Rule. Under the McGill Rule, an arbitration agreement that precludes a consumer from pursuing claims for “public” injunctive relief in court or in arbitration is unenforceable under California law.… Continue Reading
Possible Supreme Court Review of California’s “McGill Rule” Moves One Step Closer as Ninth Circuit Stays Mandates in Blair Appeals
By Mark J. Levin on
Posted in Arbitration, Regulatory and Enforcement
After denying the defendants’ petitions for panel and en banc rehearing in the Blair v. Rent-a-Center appeals, the Ninth Circuit has granted their motions to stay the issuance of the Court’s mandates for 90 days pending the filing of petitions for certiorari with the U.S. Supreme Court. If petitions for certiorari are filed, the stays will continue until final disposition by the Supreme Court.… Continue Reading
State AGs urge rejection of bill to preempt state regulation of federal student loan servicers
By John L. Culhane, Jr. on
Posted in Regulatory and Enforcement, Student Loans
A bipartisan coalition of 30 state attorneys general led by New York AG Eric Schneiderman and Colorado AG Cynthia Coffman have sent a letter to members of Congress urging them to reject a proposed amendment to the Higher Education Act (HEA) that would preempt state law requirements for servicers of federal student loans.… Continue Reading
Another trade group seeks federal preemption guidance from ED
By John L. Culhane, Jr. on
The National Council of Higher Education Resources (NCHER), a national trade association representing higher education finance organizations, has written to the Department of Education urging the ED to issue preemption guidance.
In its letter, NCHER urges the ED “to issue regulatory guidance that clearly states that federal student loan servicers and guaranty agencies are governed by the Department’s rules and requirements and those of other federal agencies, and preempt state and local laws and actions that purport to regulate the activities of participants in the federal student loan programs, including federal contractors.” … Continue Reading
Federal court issues mixed ruling on PA AG’s Dodd-Frank UDAAP claim based on alleged “rent-a-bank” and “rent-a-tribe” schemes
By Barbara S. Mishkin on
Posted in Regulatory and Enforcement, UDAAP
An attempt by the Pennsylvania Attorney General to use her Dodd-Frank Section 1042 authority recently met with only partial success in Pennsylvania federal district court. Section 1042 allows state attorneys general and regulators to bring civil actions for violations of Dodd-Frank’s prohibition of unfair, deceptive, or abusive acts or practices (UDAAP). … Continue Reading
CFPB issues first preemption determinations
By Barbara S. Mishkin on
Posted in Preemption, Regulatory and Enforcement
Last week, the CFPB issued final determinations as to whether certain Maine and Tennessee laws relating to unclaimed gift cards are preempted by federal law on gift card expiration dates. The rulings represent the CFPB’s first preemption determinations. The Tennessee determination was requested by payment card industry representatives and the Maine determination was requested by Maine’s Office of the State Treasurer. … Continue Reading
CFPB to make first preemption determinations
By Barbara S. Mishkin on
The CFPB intends to determine whether certain provisions of Maine and Tennessee laws relating to unclaimed gift cards are preempted by federal law on gift card expiration dates. The CFPB’s rulings will represent the agency’s first preemption determinations. According to the CFPB’s “notice of intent to make preemption determination” submitted for publication in the Federal Register, the Tennessee determination was requested by payment card industry representatives and the Maine determination was requested by Maine’s Office of the State Treasurer. … Continue Reading