Thomas v. Bank of America Corp.
309 Ga. App. 778
Ga. Ct. App.2011Background
- Thomas filed a putative class action against Bank of America Corp. and FIA Card Services, N.A. seeking damages and other relief.
- Thomas alleged that Credit Protection Plus (CPP) was misrepresented as broadly available and ineligible components were included in the bundle.
- The district court dismissed on the basis that federal banking law preempts Thomas's state-law claims.
- OCC regulation 12 CFR § 37 provided that CPP is a banking product governed by federal law, not state insurance law.
- Court held CPP is not insurance and that federal preemption applies, so state-law claims are preempted.
- Docket shows the purchase occurred in 2007, before the Dodd-Frank Act, which affects preemption analysis only prospectively for contracts entered into after enactment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal banking law preempts the state claims. | Thomas argues state law may regulate CPP rates and practices. | Bank defendants contend federal law preempts state regulation of CPP. | Yes; state-law claims preempted by federal banking law. |
| Whether CPP is an insurance product subject to Georgia Insurance Code. | Thomas contends CPP functions as insurance and is subject to state insurance regulation. | OCC treats CPP as a banking product, not insurance. | CPP is a banking product, not insurance; preemption applies. |
| Whether Dodd-Frank § 1044(a) preempts Thomas's claims for pre-Act purchases. | Dodd-Frank preempts state consumer financial laws. | Purchase predates Act; effect not in operation for pre-Enactment contracts. | Dodd-Frank not applicable to CPP purchased before enactment. |
| Whether the OCC's interpretation of preemption should be given Chevron deference. | Not applicable; focus on state claims. | OCC interpretation reasonable and controlling. | Court defers to OCC interpretation; preemption sustained. |
Key Cases Cited
- McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (U.S. 1819) (federal law prevails over state law in national banking)
- Watters v. Wachovia Bank, N.A., 550 U.S. 1 (U.S. 2007) (visitorial powers; federal supremacy in banking)
- Barnett Bank of Marion County v. Nelson, 517 U.S. 25 (U.S. 1996) (national bank powers preempt state regulation; field preemption considerations)
- Fidelity Federal Sav. & Loan Assn. v. de la Cuesta, 458 U.S. 141 (U.S. 1982) (express preemption; field preemption concepts and preemption standards)
- Wells Fargo Bank v. Boutris, 419 F.3d 949 (9th Cir. 2005) (illustrates field preemption in banking regulation)
- Puerto Rico Dept. of Consumer Affairs v. Isla Petroleum Corp., 485 U.S. 495 (U.S. 1988) (preemption through inaction coupled with action; governing standard)
- Clarke v. Securities Indus. Assn., 479 U.S. 388 (U.S. 1987) (great deference to agency regulatory interpretations)