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California Appeals Card Decision

SACRAMENTO, Calif. - The California Attorney General has appealed the recent court decision that said that California's new credit card disclosure law did not apply to federally-chartered financial institutions. Before a coalition of NAFCU, CUNA, bank associations and major federally-chartered card issuers challenged the law, any credit union with cardholders...

By Staff Writer | Updated on January 28, 2003

SACRAMENTO, Calif. – The California Attorney General has appealed the recent court decision that said that California’s new credit card disclosure law did not apply to federally-chartered financial institutions. Before a coalition of NAFCU, CUNA, bank associations and major federally-chartered card issuers challenged the law, any credit union with cardholders in California faced a significantly expensive credit card disclosure law. A court decision on December 23 held that that law did not apply to federally chartered institutions. A later agreement between the parties to the dispute prevented the law from being applied to state chartered institutions either. “We are disappointed that the State of California has chosen to appeal Judge Damrell’s decision but their action is not unexpected,” said Fred Becker, CEO of NAFCU. “However, given Judge Damrell’s sound reasoning and recent case law addressing federal preemption, NAFCU is confident that the plaintiffs will continue to prevail in this matter.” CUNA’s General Counsel, Eric Richard, noted that the next step was for the Court to set a schedule for briefs and arguments in the case. Richard was also optimistic about the outcome, even though the appeals court that will hear the case is the notoriously liberal Ninth Circuit. “It all depends on which judges are chosen to hear the case,” Richard said. “It will only be a three-judge panel,” he said. He also noted that the court is a federal court that could be expected to be sensitive to the federal issues the case raised.

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