California AG: local lawsuits of national banks must continue
California’s attorney general is asking a federal appeals court to confirm that local prosecutors can sue national banks, saying their national charter does not protect them from lawsuits alleging abuse of local residents. .
The request came in a so-called friend-of-court filing in a case involving four local prosecutors and Credit One Bank. Prosecutors allege that the Las Vegas-based credit card issuer harassed consumers through debt collection calls.
Credit One Bank, whose spokesperson did not respond to a request for comment, has said local prosecutors have exceeded their limits. They have argued in court filings that only the state attorney general, not local prosecutors, is allowed to sue a national bank for alleged violations of state laws.
“We are not going to give banks an exit card because of their charter status,” California Attorney General Rob Bonta said in a press release.
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California AG Rob Bonta pushed back against an argument filed in a court last week, saying federal laws do not prohibit local prosecutors from taking action and pointing to multiple instances of locally-led lawsuits.
That list included a Los Angeles city attorney’s 2015 lawsuit against Wells Fargo, which helped set off a wave of legal troubles for the bank related to its fake-accounts scandal.
“If you break the law in California, local prosecutors have the authority and responsibility to hold you accountable,” Bonta said in a statement. Press release, “We’re not going to give banks jail-free cards because of their charter status.”
In his filing, Bonta noted that all of the local DA’s lawsuits come from a single plaintiff—people from the state of California—and that local prosecutors are “a key partner of the attorney general in ensuring that Californians’ rights are protected.”
The case stems from a November 2019 subpoena that Riverside County District Attorney Michael Hestrin sent to Credit One, requesting records on debt-collection calls to consumers. Hestrin has since sued the bank, joining DAs in San Diego, Los Angeles and Santa Clara counties.
Credit One filed suit in 2020 to prevent further legal action, saying that local prosecutors play a “critical role” in serving California consumers, but federal law only allows state AGs to act as state aggregators. Allows companies to be sued alleging violations of the laws.
The bank’s lawyers wrote in 2020, “An action taken by a local government official, via an investigative subpoena, is not permitted by federal law.”
The bank’s lawyers also stated that Credit One is a “widely regulated national bank”, not for nothing that the company spends money and time ensuring compliance with federal and state laws and that it is not affiliated with the Office of the Comptroller of the Currency. Passes through constant examinations. The OCC, an independent branch of the US Treasury Department, oversees chartered banks at the national level.
The OCC agreed in a 2020 letter that the summons was illegal, Credit One Bank noted. The letter from the OCC comes from Jonathan Gould, the agency’s former chief counsel, who has since joining Brian Brooks, former controller at cryptocurrency company Bitfury.
Gold wrote in a 2020 letter to the bank, “The DA is engaged in a nonjudicial investigation of the bank, not an exercise of a law enforcement authority, that used the OCC letter to support its position in court.” Is.”
An OCC spokesman declined to comment on Tuesday.
A federal district court would later rule against Credit One Bank in the case, prompting the bank to appeal. California’s Democratic attorney general, Bonta, wrote the filing as part of the appeals court case.
