(a) Authority of national banks. A national bank may make, sell, purchase, participate in, or otherwise deal in loans and interests in loans that are not secured by liens on, or interests in, real estate, subject to such terms, conditions, and limitations prescribed by the Comptroller of the Currency and any other applicable Federal law.
(b) Standards for loans. A national bank shall not make a consumer loan subject to this § 7.4008 based predominantly on the bank's realization of the foreclosure or liquidation value of the borrower's collateral, without regard to the borrower's ability to repay the loan according to its terms. A bank may use any reasonable method to determine a borrower's ability to repay, including, for example, the borrower's current and expected income, current and expected cash flows, net worth, other relevant financial resources, current financial obligations, employment status, credit history, or other relevant factors.
(c) Unfair and deceptive practices. A national bank shall not engage in unfair or deceptive practices within the meaning of section 5 of the Federal Trade Commission Act, 15 U.S.C. 45(a)(1), and regulations promulgated thereunder in connection with loans made under this § 7.4008.
(d) Applicability of state law. A national bank may make non-real estate loans without regard to state law limitations concerning:
(1) Licensing, registration (except for purposes of service of process), filings, or reports by creditors;
(2) The ability of a creditor to require or obtain insurance for collateral or other credit enhancements or risk mitigants, in furtherance of safe and sound banking practices;
(3) Loan-to-value ratios;
(4) The terms of credit, including the schedule for repayment of principal and interest, amortization of loans, balance, payments due, minimum payments, or term to maturity of the loan, including the circumstances under which a loan may be called due and payable upon the passage of time or a specified event external to the loan;
(5) Escrow accounts, impound accounts, and similar accounts;
(6) Security property, including leaseholds;
(7) Access to, and use of, credit reports;
(8) Disclosure and advertising, including laws requiring specific statements, information, or other content to be included in credit application forms, credit solicitations, billing statements, credit contracts, or other credit-related documents;
(9) Disbursements and repayments; and
(10) Rates of interest on loans.
6
6 The limitations on charges that comprise rates of interest on loans by national banks are determined under Federal law. See 12 U.S.C. 85; 12 CFR 7.4001. State laws purporting to regulate national bank fees and charges that do not constitute interest are addressed in 12 CFR 7.4002.
(e) State laws that are not preempted. State laws on the following subjects are not inconsistent with the non-real estate lending powers of national banks and apply to national banks to the extent consistent with the decision of the Supreme Court in Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance Commissioner, et al., 517 U.S. 25 (1996):
(1) Contracts;
(2) Torts;
(3) Criminal law;
7
7 See supra note 5 regarding the distinction drawn by the Supreme Court in Easton v. Iowa, 188 U.S. 220, 238 (1903).
(4) Rights to collect debts;
(5) Acquisition and transfer of property;
(6) Taxation;
(7) Zoning; and
(8) Any other law that the OCC determines to be applicable to national banks in accordance with the decision of the Supreme Court in Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance Commissioner, et al., 517 U.S. 25 (1996) or that is made applicable by Federal law.
[69 FR 1916, Jan. 13, 2004, as amended at 76 FR 43565, July 21, 2011]
Notes of Decisions
Cited in
46
cases (
7 in the last 5 years), 2005–2025 · leading case:
Aguayo v. U.S. Bank, 653 F.3d 912 (9th Cir. 2011).
Aguayo v. U.S. Bank, 653 F.3d 912 (9th Cir. 2011).
· cites it 9× “2d at 1232 -33 (quoting 12 C.F.R. § 7.4008 (d)(2)(viii)). Specifically, the district court held the Rees-Levering notice requirements are “disclosures” under the terms of the regulation.”
Epps v. JP Morgan Chase Bank, N.A., 675 F.3d 315 (4th Cir. 2012).
· cites it 9× “3 In each of those cases, a district court in California concluded that California’s Rees-Levering Act was preempted by the NBA and the relevant OCC regulation, 12 C.F.R. § 7.4008 . Like the CLEC, the Rees-Levering Act is a consumer protection statute that imposes certain…”
Davis v. Chase Bank USA, Na, 650 F. Supp. 2d 1073 (C.D. Cal. 2009).
· cites it 9× “("NBA") and regulations promulgated by the Office of the Comptroller of the Currency ("OCC"), 12 C.F.R. § 7.4008 , because Chase is a national bank.”
Gary Davis v. Hsbc Bank Nevada, N.A., 691 F.3d 1152 (9th Cir. 2012).
· cites it 2× “In this case, Davis alleges that the advertisements violated OCC regulation 12 C.F.R. § 7.4008 (c), which states that “[a] national bank shall not engage in unfair or deceptive practices within the meaning of section 5 of the Federal Trade Commission Act, 15 U.”
Boerner v. LVNV Funding LLC, 358 F. Supp. 3d 767 (E.D. Wis. 2019).
· cites it 6× “Defendants also contend that 12 C.F.R. §§ 7.4008 (d)(4),(8), which permit banks to make loans without regard to state laws dealing with "term to maturity, including circumstances under which a loan may be called due and payable" or "other credit-related documents" preempts the…”
Aguayo v. U.S. Bank, 658 F. Supp. 2d 1226 (S.D. Cal. 2009).
· cites it 11× “” 12 C.F.R. § 7.4008 (a). The regulation then sets forth a general preemption test and specific types of state laws preempted by the NBA.”
New Mexico ex rel. King v. Capital One Bank (USA) N.A., 980 F. Supp. 2d 1314 (D.N.M. 2013).
· cites it 13× “§ 7 (“Part 7”) authorizes national banks to exercise their lending powers in connection with non-real estate loans “without regard to state law limitations concerning,” among other things, “terms of credit,” “disclosure and advertising,” and “rates of interest.”
Rose v. Chase Bank USA, N.A., 513 F.3d 1032 (9th Cir. 2008).
· cites it 3× “, as well as regulations promulgated thereunder by the federal Office of the Comptroller of the Currency (“OCC”), see 12 CFR § 7.4008 , preempt the California laws upon which Plaintiffs based their three claims.”
Philip Decohen v. Capital One, N.A., 703 F.3d 216 (4th Cir. 2012).
· cites it 3× “2011), finding that state laws relating to “contracts” and “rights to collect debts” are not preempted by the NBA because they are covered by an OCC savings clause, 12 C.F.R. § 7.4008 (e)(1). 3 The district court also found that Deco-hen failed to state a claim for breach of…”
Augustine v. FIA Card Servs., N.A., 485 F. Supp. 2d 1172 (E.D. Cal. 2007).
· cites it 4× “” 12 C.F.R. § 7.4008 (d)(2)(iv), (x). Defendant further argues that by “challenging conduct provided for in [Defendant’s] Cardholder Agreement, Plaintiff directly attacks [Defendant’s] terms of credit.”
Bate v. Wells Fargo Bank, N.A. (In Re Bate), 454 B.R. 869 (Bankr. M.D. Fla. 2011).
· cites it 10× “39 However, the plain language of 12 C.F.R. § 7.4008 (d)(2) provides that national banks “may make non-real estate loam without regard to state law limitations concerning” among other things, “[t]he terms of credit,” including “balance, payments due,” “the circumstances under…”
— 12 C.F.R. § 7.4008(d)(1) — 1 case
— 12 C.F.R. § 7.4008(e)(4) — 1 case
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