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March 9, 2018

Stroock Special Bulletin

By: David W. Moon, Julia B. Strickland, Quyen T. Truong

On March 2, 2018, a three-judge panel of the Ninth Circuit Court of Appeals reversed dismissal of a putative class action in Lusnak v. Bank of America, ruling that the National Bank Act (NBA) does not preempt California’s Unfair Competition Law (UCL) requiring banks to pay interest on borrowers’ escrow accounts.  In one of the most important aspects of this holding, the panel essentially rejected the preemption rules of the Office of the Comptroller of the Currency (OCC).  This ruling could mark the beginning of a series of preemption battles and rise in class actions.

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