Ninth Circuit Affirms Preemption of State Law Claims Asserting National Bank Mislead Consumers by Failing to Make Material Disclosures

Disclosures National Bank Act

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 of Am., N.A., No. 11-57194, 2013 WL 2234073 (9th Cir. May 22, 2013). In this case, the bank charged a customer a fee for using a cash-access account, which could be avoided by withdrawing all funds from the account each month before the fee was assessed. The customer alleged that the failure to disclose the ability to avoid the fee violated, among other things, California's Consumer Legal Remedies Act and Unfair Competition Law. The district court dismissed the case, holding that the NBA preempts state laws that attempt to regulate disclosures of national banks on deposit accounts. The district court also rejected the customer’s argument that state laws that require all businesses generally (as opposed to banks in particular) to refrain from misrepresentations and from fraudulent, unfair, or illegal behavior cannot be preempted by the NBA. The Ninth Circuit affirmed the dismissal on the same grounds.