Alert February 10, 2009

California Appellate Court Holds that National Bank Act Preempts State Holiday Statutes as to Credit Card Payment Due Dates

A California appellate court dismissed a class action lawsuit alleging that California’s and Arizona’s “holiday statutes” prohibited Bank of America from charging late fees or interest for credit card payments posted the first business day after a holiday due date. Holiday statutes provide that if a legal or contractual act is required to be performed on a holiday, the act may be performed on the next business day without any adverse consequences. The court held that holiday statutes are preempted by OCC regulations which allow national banks to set the schedule for repayment on non-real estate loans and set the payment dates without regard to state law limitations. The court reasoned that by changing when a payment is due, holiday statutes affect the schedule for repayment of principal and interest and affect the payments due set by a national bank. Click here for Miller v. Bank of America, No. C057896 (Cal. Ct. App. Jan. 28, 2009).