The United States District Court for the Northern District of Ohio held that the National Bank Act and OCC regulations do not preempt claims that a national bank failed to comply with repossession notice provisions contained in the Ohio Retail Installment Sales Act and Uniform Commercial Code. Plaintiffs alleged that defendant violated the RISA and UCC by failing to disclose the correct date of the public sale and the correct minimum bid, by failing to conduct a commercially reasonable sale and by charging prohibited fees. Defendant argued that the NBA and OCC regulations preempted plaintiffs’ claims. The Court rejected defendant’s arguments that the claims were preempted through express preemption, field preemption and obstacle preemption.
The Court, relying in part on Aguayo v. U.S. Bank, 653 F.3d 912 (9th Cir. 2011) and Epps v. JP Mortgage Chase Bank, 675 F.3d 315 (4th Cir. 2012), rejected defendant’s argument that the RISA and UCC repossession notice and collateral disposition provisions were expressly preempted. The Court determined that the provisions of the RISA and UCC related to the rights to collect debts and would, therefore, not be preempted pursuant to the savings clause contained in 12 C.F.R. § 7.4008(e)(4). The Court also dismissed the argument that repossession notices are “other credit-related documents,” holding that the term draws its meaning from the other terms listed in section 7.4008(d)(8), which relate to documentation at the early stages of a loan. The Court also rejected defendant’s obstacle preemption argument on the grounds that the debt-collection laws could not interfere with defendant’s lending operations because they came into effect only after a borrower defaulted. The Court further noted that defendant could not claim the benefits of a state law that provided it the right to repossess a vehicle and also claim the law significantly interfered with its ability to engage in the business of banking.