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Dreher Tomkies LLP
Attorneys at Law
2750 Huntington Center
41 South High Street
Columbus, Ohio 43215
Telephone (614) 628-8000
Fax (614) 628-1600

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The Office of Thrift Supervision (OTS) concluded in a letter opinion that federal law preempts the application of California’s minimum payment law to federal savings associations. OTS Letter from Carolyn J. Buck, Chief Counsel (Oct. 1, 2002). The California law, Section 1748.13A, requires certain language and information regarding minimum payments to be included on billing statements credit card issuers provide to their cardholders, including estimates of the length of time necessary to pay off their balances and the total cost of credit. The OTS concluded that Section 560.2(b)(9) preempts the California statute’s disclosure requirements. Section 560.2(b)(9) provides that state laws purporting to impose requirements on federal savings associations regarding “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 and laws” are preempted. The OTS also concluded that to the extent that the California statute seeks to compel federal savings associations to forbear from collecting interest due or to set minimum payments above a state‑determined threshold in order to avoid triggering the California’s statute’s requirements, it is preempted by Section 560.2(b)(4). That regulation provides, in relevant part, that state laws purporting to impose requirements on federal savings associations regarding the “terms of credit, including amortization of loans . . . [and] payments due” are preempted.

For more information regarding this Alert, please contact Mike Tomkies at (614) 628‑1603 or mtomkies@dltlaw.com or Elizabeth Anstaett at (614) 628‑1604 or eanstaett@dltlaw.com.