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Mbna america credit card

mbna america credit card

WILMINGTON, Del.– MBNA has begun issuing credit cards that feature MasterCard PayPass contactless payment technology to its new and existing. FPWA, FBS and NFS are Fidelity Investments companies. The creditor and issuer of this card is Elan Financial Services, pursuant to a license from Visa U.S.A. bank of america credit card The BankAmericard credit card is an excellent 0% credit card for people with excellent credit, I love my MBNA card.

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Credit cards: are issued by MBNA Limited. Registered Office: Cawley House, Chester Business Park, Chester CH4 9FB. Registered in England and Wales under company number 02783251. Authorised and regulated by the Financial Conduct Authority. MBNA Limited is also authorised by the Financial Conduct Authority under the Payment Services Regulations 2017, Register Number: 204487 for the provision of payment services.

Personal loans: for personal (unsecured) loans, MBNA Limited:

  • Works exclusively with Lloyds Bank plc.
  • Is a credit broker and not the lender.

MBNA is a trading style of Lloyds Bank plc. Lloyds Bank plc Registered Office, 25 Gresham Street, London EC2V 7HN. Registered in England and Wales number 2065. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278. Lloyds Bank plc adheres to the Standards of Lending Practice, which are monitored and enforced by the Lending Standards Board.

MBNA Limited and Lloyds Bank plc are both part of the Lloyds Banking Group. More information on the Group can be found at

The issue of a credit card or loan and the amount of credit or lending offered to you depends on an assessment of your personal circumstances. To apply, you must be a UK resident aged 18 and over.

For credit cards and loans, the mbna america credit card rate offered to you will also be based on this assessment.

Calls and online sessions (e.g. completing an application) may be monitored and/or recorded for quality evaluation, training purposes and to ensure compliance with laws and regulations. Not all telephone banking services are available 24 hours, 7 days a week. Please speak to an adviser for more information.




Credit Card America

In 1987 Robert Townsend charged $100,000 on his fifteen personal credit cards to finance the production of a major motion picture, Hollywood Shuffle. It was a big risk, a desperate gamble that the movie would be successful and pay off the bills. It worked. Most Americans go through life making credit-card gambles these days, though on a much smaller scale, charging their clothes, furnishings, vacations, toys, and more in the hope that they’ll have the time and ultimately the money to pay it off. It’s hard to imagine that a few years ago you couldn’t charge tickets to a theater, let alone the making of a movie. Now you can charge virtually anything—and some things you must charge: pity the soul who tries to rent a car with mere cash.

Our love affair with—and subsequent marriage to—the credit card was launched in 1950 by an embarrassed businessman named Frank X. McNamara. According to the story he told so many times it became a legend, one day he finished a meal in a fine New York restaurant and discovered he had no cash to pay for it. Credit cards for restaurant meals were as yet unheard of, so he called his wife and had her rush over with money to bail him out. His predicament gave him the idea that would revolutionize the American way of spending. He invented Diners Club.

McNamara, thirty-five, was well prepared for the job; he was a credit specialist for a credit company in Manhattan. He founded Diners Club in the spring of 1950—not long after that lunch—on just $10,000 put up by his partner and attorney, Ralph Schneider. Within a year about two hundred people had been persuaded to carry the world’s first multiuse charge card. For an annual fee of three dollars they had the means to charge meals at any of twenty-seven restaurants around the city.

By the end of 1951 more than a million dollars had been charged on the growing number of pressed-paper Diners Club cards, and the company was turning a profit and starting to pay off its $58,000 debt. But nobody yet foresaw the makings of a multibillion-dollar international in dustry—least of all McNamara. He sold out to Schneider in 1953, for $200,000. He realized that many Americans were suspicious of the basic idea of credit, and he thought they would remain so. As Lawrence Lockey, dean of the School of Commerce at the University of Southern California, wrote in 1954, “Deep in our cultural heritage is the feeling that a man should not live beyond his means. From Ben Franklin’s Poor Richard to Mark Twain’s Pudd’nhead Wilson, we have been told that the thrifty man pays his own way.” Thirty-seven years later credit itself almost seems to be a part of our heritage.

By the 1950s gas and single-store charge cards were common, but cash was still the standard for all they didn’t cover.

Gasoline and store charge cards were already common by the 1950s, but cash was the standard for every kind of personal purchase those didn’t cover. Schneider discovered that people wouldn’t believe it when they were told that “just by applying, they would get the credit card and we would take the risk [that they wouldn’t pay]. They thought there had to be a catch.”

There was indeed a catch, but it snared the merchant, not the consumer. Devising the system that card issuers use to this day, Diners Club (which is now a subsidiary of Citicorp) underwrote the cards mainly by charging retailers a “discount” of up to 10 percent on each sale; it repaid the merchant that much less than the amount of the sale. Despite the dent in profits that this could mean, retailers signed up throughout the early 1950s, enticed by Diners Club’s persuasive argument that people with cards spend more than those without.

The problem was to persuade enough people to carry the cards. Diners Club turned to promotions such as giving away a round-the-world trip on a popular television show, “The Big Program.” The winners of that prize, Mr. and Mrs. Harold Bortzfield, charged all their expenses on a Diners Club card and made it “from New York to New York without a dime in their pockets.” The shortage of cardholders didn’t last long. Before Diners Club was even a decade old, attitudes toward spending were clearly changing, at least among businesspeople. By 1958 Time magazine could observe that “in the nation’s expense-account economy, nobody is anybody unless he can say, ‘Charge it.’” That same year, newspapers revealed that a Hollywood divorce settlement had spelled out who was to retain custody of the couple’s Diners Club card.

But would the rise of the credit card be a boon or a curse to the citizenry? One writer in 1961 worried about “the effect an excess of on-the-cuff living has on our sense of proportion and values. It is not that we want too many comforts, but we must have all of them now, this minute.” The Nation, on the other hand, welcomed “the democratization of conspicuous consumption” and a world in which “almost anybody can judiciously sample the good life—the realy good life.” The plastic passport to luxury was clearly here to stay.

As early as the eighteenth century, wealthy Americans had habitually run up huge debts with retailers and considered it an impertinence to be asked to pay. Stores had found that a businesslike monthly bill could induce most such people to settle up on a timely basis. The first large American store to introduce formal charge accounts was Cowperthwaite & Sons, of New York City, in 1807. In 1905 Spiegel began offering credit terms on everything in its catalogue. The next year Sears began to sell washing machines for installments of eleven cents a week. Most such early credit plans simply added the interest to be charged to the purchase price and divided by the number of payments. The result was a fixed monthly bill that tended to last about as long as the item purchased.

Western Union came up with what may have been the first actual card for charging, about 1914. Around the same time, a few hotels began giving their regular business travelers charge plates—dog-tag-like affairs sometimes known as metal money—and in 1924 General Petroleum, of California, introduced the gasoline credit card.

But the term credit card actually preceded all these pioneer events. It was coined by the visionary Edward Bellamy, in his popular Utopian novel Looking Backward: 2000 to 1887published in 1888. In Looking Backward a young man falls unconscious and wakes up at the millennium to an ideal world where cash has been replaced by “a credit corresponding to his share of the annual product of the nation … and a credit card is issued him with which he procures at the public storehouses … whatever he desires, whenever he desires it.”

The first credit card that offered modern revolving-credit terms was developed in the late 1930s by Wanamaker’s, the Philadelphia department store. Customers holding the Wanamaker’s charge-a-plate were given the choice of paying their balances partly or in full at the end of each month. The more they paid off, the more they could subsequently charge. The idea was to help buy itunes gift card with apple store gift card reestablish purchasing first united bank lubbock tx lost in the Depression—and buy a little more than they could with cash.

Wartime lending restrictions kept charge cards from proliferating in the early 1940s, but soon after the war the Universal Air Travel Plan emerged, a cooperative venture joined by nearly every existing airline. For a deposit of $425, a company could issue an unlimited number of UATP cards to its employees. They could then charge flights, and the company would receive a single monthly bill for all of them.

By 1955 the convenience of charging was beginning to catch on in a big way. Diners Club was followed by Trip Charge, Golden Key, Gourmet Guest Club, Esquire Club, and Carte Blanche, all catering to executives. The wealthiest and ultimately most successful competitor was American Express, which introduced its card in 1958 with a mailing to more than eight million customers of various banks. American Express came to dominate the field partly because it could cover the credit it was extending with the float from its traveler’s checks, which are, after all, a form of interestfree loan from consumers to American Express.

As the cards blossomed, so did advertising encouraging consumers to charge up a luxurious life. Carte Blanche promised a nineteen-year-old seventy-three-dollar-a-week clerk named Joseph Miraglia that it would “open up a new and magical world” if he simply filled out an application. He did so and upon receiving his card embarked on a $10,000 spending binge.

Using the card both to charge purchases and to guarantee personal checks, Miraglia visited Las Vegas, Montreal, Florida, and Cuba, staying only in the best hotels. “For a month … I was somebody,” he said after he was finally arrested for passing bad checks. “But next time I’ll pay cash.” He blamed Carte Blanche’s sponsor, Hilton Hotels, for offering him credit in the first place: “I would like to speak to Mr. Hilton about his credit policies. If that man doesn’t watch his credit department, he’ll go bankrupt.”

Hilton, of course, had had no intention of extending credit to Miraglia or anyone else of his marginal economic status. Carte Blanche, Diners Club, American Express, and the rest of the travel-and-entertainment—or T&E—cards were meant for businesspeople on expense accounts. But banks sensed among the less affluent a pent-up desire to spend, and they began cautiously to explore issuing credit cards of their own.

Banks have the advantage of being able to give loans and charge interest. Thus they can issue credit cards that allow installment payments, and thereby profit not merely from an annual fee and the discount charged to retailers, as with the T&E cards, but also from the interest they earn.

Nonetheless, at first, all the bank cards in the 1950s were free to consumers, extended no credit, and charged no interest. They made money solely from the merchant discount. As a result they weren’t very profitable, and many of, the banks gave up on them. Only 27 of the 200 bank-card operations existing in 1967 had been around since the 1950s.

One of those 27 was BankAmericard. The Bank of America, in San Francisco, took its cue from department-store charge accounts and early on started offering a choice of suntrust bank locations asheville nc plans. Consumers could pay up in full each month or pay in small monthly installments, plus interest. BankAmericard also pioneered the cash advance. The service charge was high—4 percent per transaction—but the idea of instant cash made the service immediately popular. (Most states later outlawed such high service charges as usurious.)

BankAmericard was soon accepted across California and became the first bank credit card to turn a profit. Bankers from all over the country descended on the Bank of America’s headquarters to learn the secret of its success—so many of them that in 1966 BankAmericard, which would eventually become Visa, began to form alliances with banks outside the state.

In 1966 Chicago banks dumped five million unsolicited cards into the mail. Dead people, babies, and dogs got them.

Bank One, a tiny hundred-million-dollar bank in Columbus, Ohio, was among the first to join up. First National City Bank of New York (now Citibank) had threatened to extend its new Everything Card nationwide, and Bank One feared being squeezed out of the credit-card business by the giant. According to John Fisher, a retired senior vice president, Bank One appealed for help to the Bank of America just as the Bank of America was deciding that a bank card accepted by retailers across the nation might be possible.

It turned out that the two banks used utterly incompatible computer systems. “In order to process BankAmericard charges, we had to go to the gas company in town,” Fisher remembers. “We ran the programs at night for six months when the gas company wasn’t using the equipment.”

Many banks resisted BankAmericard simply because of its name. They weren’t about to give a billboard, however small, to a fellow bank. Some of them took advantage of franchise plans offered by American Express, Diners Club, and Carte Blanche, which gave them a rebate on charges made by their own customers. A more significant challenge was spearheaded by the Wells Fargo Bank, which joined with seventy-seven others to form the Western States Bank Card Association and set up a card network specifically to compete with BankAmericard. The name they chose was Master Charge. They found the name already in use and bought it from its owner, the First National Bank of Louisville, Kentucky, which had itself bought it from a group of local merchants.

At the same time, Marine Midland Bank, in New York, was starting yet another credit-card network, named Interbank, to enable its customers to charge purchases throughout the country. Interbank merged with Master Charge to fight BankAmericard in 1968, and soon after, First National City Bank converted its 1.3 million Everything Card holders to Master Charge. Master Charge was now the biggest bank card in the country.

Not every bank joined the stampede to Master Charge or BankAmericard, at least at first. Five Chicago banks decided to go it alone, and they didn’t take long to regret their decision. Studies had shown that 40 percent of any group of people who received cards in the mail would start using them—far more people than would actually request the cards. So, just before Christmas, 1966, five million credit cards were “put on the air” in Chicago.

Five million holiday credit-card shoppers would undoubtedly have created a bonanza for the banks, but in the rush to get in on this new market, the banks had been less than cautious in assembling their lists. Some families received fifteen cards. Dead people and babies got cards. A dachshund named Alice Griffin was sent not one but four cards, one of which arrived with the promise that Alice would be welcomed as a “preferred customer” at many of Chicago’s finest restaurants. 

The First National Bank of Chicago’s holiday ads for its card called it “The Nicest Thing Since Money.” At least one segment of the population wholeheartedly agreed. Hundreds of Chicagoans discovered the truth of that slogan: they could simply use or sell any cards that they “found.” To make matters easier for them, the law at the time held that the person whose name was on a card was liable for all the charges made on it—even if he or she had never requested or received the card.

Other credit-card issuers, including the Bank of America, had done similar mass mailings of cards and were to do so for several years more. Kenneth Larkin, the vice president in charge of BankAmericard’s national roll-out, argued, probably correctly, mbna america credit card it was the only way to initially assure merchants that there would be enough cardholders to make accepting the cards worthwhile. But the disaster in Chicago sparked a movement to regulate the industry.

Public Law 91-508, signed by President Nixon in October 1970, prohibited credit-card issuers from sending cards to people who hadn’t requested them. By then the banks had already penetrated most markets fully enough to be grateful for the chance to end a competitive practice that had cost them millions in bad debts and fraud. The law also all but eliminated cardholder liability for charges on a card reported lost or stolen. But woe to the consumer whose bill was in error or who wanted to withhold payment on unsatisfactory merchandise. No matter how just the customers’ complaints, the issuing banks could—and often did —slap a bad credit rating on them if they failed to pay the full bill during the dispute. That practice was outlawed in 1974, by the Fair Credit Billing Act, which set standard procedures for resolving billing disputes.

Credit cards have not only replaced cash for most purposes, they have also in effect created cash.

Women, meanwhile, had become increasingly vocal about their particular difficulties with credit cards. In April 1974 Cynthia Holmes applied for a bank credit card both in her full name and as C. E. Holmes. Without explanation the bank rejected Cynthia and sent C.E. a card and a “Dear Preferred Customer” letter. Married women often couldn’t obtain credit in their own names even if they had good jobs or were the sole support of a household.

The Equal Credit Opportunity Act, passed in 1975, imposes penalties of up to $10,000, plus damages, on credit issuers found guilty of sex discrimination. Amendments to it have broadened the law to prevent credit discrimination on the basis of race, color, religion, national origin, age, or even reliance on public assistance. Credit-card rejection must now be accompanied by a specific explanation, and the applicant can appeal.

Denial of credit is a truly serious problem in an age when credit has become more widely accepted than any other form of payment. By the early 1970s credit cards had evolved into a form of identification, a proof of credit-worthiness, and a travel necessity of undreamed-of power. It was a sign of the times when in 1973 a physician arrived at a Boston hotel intending to write a personal check for his bill and was told there were no rooms available—until he pulled out a credit card. Then he got a room immediately.

Aggressive marketing of both bank and T&E cards helped ensure the proliferation of outlets for credit-card spending. The new uses that sprang up for credit cards in the late sixties and early seventies included church collections in Vermont, bail bonds in Arizona, and gynecologist’s bills in Denver. For a time taxpayers in ten states could even charge federal income tax payments of up to $500 on Master Charge or BankAmericard. But the cards still weren’t a consistent moneymaker for the banks. The problem was, too many people paid up in full every month, especially people with higher incomes, who tended to think of the cards as merely a convenience. Bankers came to realize that the ideal credit-card customer was, as Fortune put it, “the gainfully employed on the lower end of the income scale, to whom a $500 line is a great boon.”

In January 1973 the Marquette Bank, in Minneapolis, became the first bank to pad its revenues with an annual fee. Before long the yearly fee was ubiquitous. In a bold move in 1976 Citibank began charging a monthly fee to cardholders who settled in full. “We want to make the freeloaders pay,” declared an unnamed Citibank executive. But the policy created such a storm of negative publicity that the bank dropped it two years later.

Citibank also pioneered the massive out-of-state directmail campaign, in 1977, reaching an estimated twenty-seven million homes in its opening salvo. The mailing was timed to occur just as BankAmericard, in an effort to broaden its appeal, especially overseas, became Visa. Citibank’s letter pointed out that “Visa is replacing BankAmericard.” BankAmericard’s banks complained that this was an attempt to mislead BankAmericard customers into thinking their cards would soon be useless. Whatever the reason, the mailing was a success, and it began the seemingly endless stream of bank-card solicitations we find in our mailboxes today. Nowadays over a billion credit-card offers are sent out each year—to people who already possess an average of 2.9 Visas or MasterCards. (Master Charge became MasterCard in 1979, to dispel what its president, Russell Hogg, called “the tinge of the blue collar.”)

When the prime rate hit 20 percent in the early 1980s, the banks found that consumers didn’t mind paying rates of 18 to 22 percent on their credit-card balances. The high market interest rates came down before long, but credit-card rates stayed high. The banks discovered, as they had with annual fees, that people didn’t terribly mind paying more for their credit cards. As Saul Haskell of Institutional Investor writes, “The miracle for which all card issuers should be grateful is that consumers didn’t storm bank offices and demand that rates be lowered along with the cost of funds.” What the stubbornly high interest rates have accomplished is to attract many new players into the credit-card arena, forcing those already there to counter with increasingly imaginative marketing strategies. Sears introduced its Discover card, the first major competitor to MasterCard and Visa in years, in 1986, with no annual charge and a guaranteed annual rebate to consumers of up to 1 percent of their purchases. Some of the other incentives Discover offered its early takers seemed odd—discounts on meals at Denny’s restaurants and half off a psychiatric exam—but fifteen million people signed up in little more than a year, despite a higher-than-average interest rate of 19.8 percent.

American Express added a new twist, the premium card, when it launched the Gold card in 1966, but the idea didn’t really catch on until the eighties. Gold cards from Visa and MasterCard (and, since 1990, Discover) usually offer lower interest rates and higher credit limits than the ordinary bank card, but the real attraction is, of course, something else entirely. As a top executive of a New York brokerage firm admitted in 1982, “If you want to know the honest truth, I have a Gold card because of the status… I use it because it looks neat.”

As Gold cards proliferated widely in the eighties, their glamour inevitably started to fade. This particularly concerned American Express, which had long based its marketing appeals—and justified its higher annual fees—on prestige. To keep ahead in cachet, the company came up withthe Platinum card, exclusively for “cardmembers” who charge more than $10,000 a year. By 1985 more than fifty thousand Americans had Platinum cards, and they were paying $250 a year for the privilege. In 1989 the fee went up to $300.

That stiff tariff wins Platinum’s holders a host of personal services. American Express representatives search the world for hard-to-find gifts, pick up belongings left behind by travelers, and arrange members-only entertainment offers like Tony Awards parties with the stars. If a Platinum cardholder falls ill while traveling, he or she can request free assistance—and even, if necessary, free medical evacuation home to America.

The proliferation of Gold and Platinum cards in the 1980s generated rumors of an ultimate, highly exclusive, never publicized Black card. Carried by the likes of Adnan Khashoggi and Imelda Marcos, it allows you to demand private shopping sprees at some of the world’s most exclusive stores or to summon a helicopter to pick you up in the middle of the Sahara. Michael Lewis, the author of Liar’s Poker, spread the story when writing for The New Republic in 1989. American Express vehemently denies the existence of the Black card. Platinum, they insist, is as potent a card as they offer.

The persistence of the Black-card myth suggests the social importance credit cards have taken on for so many of us. As one business writer puts it, “To have one’s credit cards cancelled is now something akin to what being ex- communicated by the Medieval church meant.” Another form of credit-card mortification has added a phrase to the language: being maxed out. And having your credit card refused—rightly or erroneously—has become a major social embarrassment instantly familiar to almost anyone. A typical story is that of an urbane New Yorker several years ago who accidentally picked up a friend’s American Express card and didn’t realize it until weeks later, when he innocently presented it at Brooks Brothers long after it had been reported stolen. He was nearly led away in handcuffs. Having your own card swiped can be even more troublesome—or could until regulatory protections were established. A Florida woman named Lottye Carlin spent eight years fighting the Southeast Banking Corporation over $2,064.35 billed to her for charges she hadn’t made on a MasterCard she hadn’t asked for. She was turned down for a mortgage on a condominium she wanted and spent $8,000 in legal fees but ended up winning $150,000 and a written apology from the bank.

Nowadays there is almost nothing you can’t use a credit card for. “Escort services,” among other illegal businesses, accept them. Doctors and dentists love them. One of the most successful advertising campaigns in American history involved MasterCard and dentists. MasterCard put an ad in the Journal of the American Dental Association showing a man and a woman sitting at a desk going over their bills and looking distressed, the man holding up one bill and saying, “It’s the dentist; he can wait.” The ad had a coupon for further information, and it generated one of the best responses of any coupon ever.

Of course, credit cards have not only replaced cash for most purposes but also in effect created cash by making it instantly available virtually anywhere. The credit-card cash advance is now as ubiquitous as the automated teller machine. The typical American can have hundreds of dollars in hand at almost any time and place he or she wants it. And lately there have been inroads by debit cards—cards that don’t command credit but that rather write off a purchase against money the cardholder has on deposit in a bank.

The revolution now seems complete. Americans charge two hundred billion dollars a year on their credit cards.

The revolution seems complete. Americans today charge more than $200 billion a year on their credit cards, and fewer than 20 percent of households don’t have any cards. MasterCard alone issues 90 million cards; Visa has even more—138 million—on which cardholders ring up more than $37 billion a year in charges. The Nilson Report, a creditcard industry newsletter, estimates that the banks that issue the cards make a profit of 2.5 percent a year, after taxes, on all the charges.

In the 1980s, as the markets for bank credit cards approached saturation, many issuers began searching for ways to stand out. One was to offer cards bearing the names of specific “affinity groups,” such as alumni clubs, charities, and trade unions. The holder of an affinity card gets to display the logo of the organization represented and knows that the organization will get some slice of the profit each time the card is used. Some of these programs have been extremely popular; many have not. The Bank of New York signed up 1.5 million AFL-CIO members for affinity cards in eighteen months; Chase Manhattan’s Muscular Dystrophy Association card, with a color photograph of Jerry Lewis, was a flop. And this year the MBNA America Bank, of Delaware, began offering cards bearing the holder’s surname—for instance, an “Allen Visa” for people whose last name is Allen. The mailing urged Allens to “Share the Allen Heritage,” suggesting, “If you’re proud of being an Allen, you may now carry a credit card which will display your pride every time you open your wallet.” The card “tastefully showcases the Allen name and earliest coat-of-arms.”

The newest trend in the credit-card business, begun by Sears with the Discover card, is the aggressive entry of nonfinancial companies into the bank-card arena (they can do so only in conjunction with a bank). Several airlines, including United and American, have offered Visas and MasterCards that earn bonus miles with every purchase. Ford, General Electric, and Prudential have likewise issued Visas and MasterCards. American Express introduced the Optima card in 1987, with installment payments and interest charges to compete with the bank cards, and it fixed the interest rate at 16.25 percent, a notch lower than most banks.

AT&T joined the fray in March 1990 with its AT&T Universal MasterCard and Visa. The Universal card offered a 10 percent discount on long-distance calls (in the first year of its promotion), but its biggest attraction was that for a while it required no annual fee as long as the card was used at least once a year. AT&T received a quarter of a million inquiries about the card within hours of its introduction, and banks were soon complaining to regulators about unfair competition.

Fair or not, the competition for our credit-card dollars is far from over. A Japanese company has even been quietly test-marketing a credit card of its own in California, adding one more to the twenty-five thousand different cards available in this country. The average American already has a walletful, and with any one of them he or she can command luxuries formerly reserved for the wealthy—and pay the price later. In forty years we have almost all become casual constant borrowers. What Alfred Bloomingdale, then president of Diners Club, predicted in 1960 seems to have come true: an America where “there will be only two classes of people—those with credit cards and those who can’t get them.


Fidelity® Rewards Visa Signature® Card

We may change APRs, fees, and other Account terms in the future based on your experience with Elan Financial Services and its affiliates as provided under the Cardmember Agreement and applicable law.

1. You will earn 2 Points per dollar in eligible net purchases (net purchases are purchases minus credits and returns) that you charge. Account must be open and in good standing to earn and redeem rewards and benefits. Upon approval, refer to your Program Rules for additional information. You may not redeem Reward Points, and you will immediately lose all of your Reward Points, if your Account is closed to future transactions (including, but not limited to, due to Program misuse, failure to pay, bankruptcy, or death). Reward Points will not expire as long as your Account remains open. Certain transactions are not eligible for Reward Points, including Advances (as defined in the Agreement, including wire transfers, travelers checks, money orders, foreign cash transactions, betting transactions, lottery tickets and ATM disbursements), Annual Fee, convenience checks, balance transfers, unauthorized or fraudulent charges, overdraft advances, interest charges, fees, credit insurance charges, transactions to fund certain prepaid card products, U.S. Mint purchases, or transactions to purchase cash convertible items. The 2% cash back rewards value applies only to Points redeemed for a deposit into an eligible Fidelity account. The redemption value is different if you choose to redeem your Points for other rewards such as travel options, merchandise, gift cards, and/or statement credit. Other restrictions apply. Full details appear in the Program Rules new card customers receive with their card. Establishment or ownership of a Fidelity account or other relationship with Fidelity Investments is not required to obtain a card or to be eligible to use Points to obtain any rewards offered under the program other than Fidelity Rewards.


Because the interest and other fees charged on any outstanding balance are greater than the cash value of the rewards points, you may pay more in fees and interest than the value of the points you earn if you do not pay your bill in full each month.


To receive a deposit, you must link your eligible Fidelity® account to your card. This can be accomplished in any of following ways. 1. You may contact Elan Financial Services Customer Service at the toll-free phone number located on the back of your credit card and provide them with your eligible Fidelity® account (s) number. 2. Simply select the “Manage Reward Points” hyperlink from the credit card snapshot page on and follow the easy steps. You may also watch a brief video that describes the linking process on the credit card snapshot page also found on Please note that automatic redemptions will occur on a monthly basis as long as you have reached the point redemption threshold of 2,500 Points.


Eligible accounts include most nonretirement registrations as well as Traditional IRA, Roth IRA, Rollover IRA, SEP IRA, Fidelity Charitable® Giving Account®, Fidelity HSA®, and Fidelity®-managed 529 College Savings Plan accounts. The ability to contribute to an IRA or 529 college savings plan account is subject to IRS rules and specific program policies, including those on eligibility and annual and maximum contribution limits. Full details appear in the Program Guidelines new card customers receive with their card. Contributions to Fidelity Charitable® are generally eligible for a federal income tax charitable deduction. Please consult with your tax advisor. The list of eligible registration types may change without notice at Fidelity’s sole discretion. For more information about whether a particular registration is eligible, please call 1-800-FIDELITY (800-343-3548).

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Elan Financial Services provides zero fraud liability for unauthorized transactions. Cardmember must notify Elan Financial Services promptly of any unauthorized use. Certain conditions and limitations may apply.


Cardmembers are responsible for the cost of any goods or services purchased by the Visa Signature Concierge on cardmembers’ behalf.

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Fidelity Go® provides discretionary investment management for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, FBS and NFS are Fidelity Investments companies.

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Lloyds banks on credit card growth with $2.4 billion MBNA buy

LONDON (Reuters) - Lloyds Banking Group LLOY.L is buying the MBNA UK credit card business from Bank of America BAC.N for 1.9 billion pounds ($2.4 billion) in an effort to increase profit and reduce its reliance on mortgage lending.

The move represents the first major acquisition for Britain’s biggest mortgage lender, which is part-owned by the government, since it was bailed out during the 2007-09 crisis.

Lloyds said the deal, which is expected to close in the first half of 2017, includes around 800 million pounds of acquired equity and assumes 240 million pounds for future claims for mis-sold loan insurance (PPI).

Analysts said the move represented a good use of the bank’s excess cash, but warned it carried some risks given Britain’s uncertain economic outlook following the country’s vote to leave the European Union in June.

“Lloyds will be broadly doubling up its exposure to credit cards at a particularly benign point in the bad debt cycle and ahead of a potential slow-down. once the terms of the UK’s exit from the EU are reached,” Gary Greenwood of Shore Capital said.

The British lender said it would pay through cash generated by its ordinary business operations.

“The acquisition. increases our participation in the expanding UK credit card market with a multi-brand strategy and advances our strategic aim to deliver sustainable growth as a UK focused retail and commercial bank,” António Horta-Osório, Group Chief Executive, said.

Lloyds said it was confident of being able to deliver a progressive and sustainable ordinary dividend in 2016, but Greenwood said the bank might reconsider its special dividend promised for the end of the year in order to fund the deal.

The deal will lift the contribution of the consumer finance business to 21 percent of the bank’s pre-tax profits from 17 percent, reducing Lloyds’ reliance on the UK mortgage business, Joseph Dickerson of Jefferies said.

MBNA, which made after-tax profits of 123 million pounds in the first half of 2016, would add 650 million pounds a year to group revenues, Lloyds said, adding the deal could shave 100 million pounds a year from MBNA’s cost base.


Filed 6/21/12

Plaintiff and Appellant,
Ct.App. 4/3 G040798
Orange County
Defendant and Respondent.
Super. Ct. No. 04CC00598

We granted review to address whether the National Bank Act of 1864 (13 Stat. 99)
(NBA) preempts Civil Code section 1748.9, a California law requiring that certain
disclosures accompany preprinted checks that a credit card issuer provides to its
cardholders for use as credit. The NBA contains no such requirement with respect to the
issuance of so-called “convenience checks” to credit customers. Instead, it broadly grants
to national banks “all such incidental power as shall be necessary to carry on the business
of banking. . by [among other powers] loaning money on personal security.”
(12 U.S.C. § 24, par. Seventh.) We conclude that the NBA preempts Civil Code section
1748.9 because the state law stands as an obstacle to the broad grant of power given by
the NBA to national banks to conduct the business of banking. Accordingly, we reverse
the Court of Appeal‟s judgment and remand the matter to that court for further
proceedings consistent with our opinion.
As indicated in the Court of Appeal‟s opinion below, defendant MBNA America
Bank, N.A. (MBNA) “renamed itself as FIA Card Services, N.A. Nevertheless, for the

sake of simplicity, we shall follow the parties in continuing to refer to defendant as
In 2003, MBNA issued a credit card to plaintiff Allan Parks. Later that year, as
part of its service to cardholders, MBNA extended credit to plaintiff by sending him
preprinted drafts, commonly referred to as “convenience checks.” (See Rose v. Chase
Bank USA, N.A.(9th Cir. 2008) 513 F.3d 1032, 1034 (Rose).) Plaintiff used several of
these convenience checks to purchase holiday gifts and pay bills, and he incurred finance
charges in excess of those he would have incurred had he used his credit card for similar
transactions. Mbna america credit card convenience checks that MBNA sent to Parks did not include
disclosures required by Civil Code section 1748.9. That statute says: “A credit card
issuer that extends credit to a cardholder through the use of a preprinted check or draft
shall disclose on the front of an attachment that is affixed by perforation or other means
to the preprinted check or draft, in clear and conspicuous language, all of the following
information: (1) That „use of the attached check or draft will constitute a charge against
your credit account.‟ (2) The annual percentage rate and the calculation of finance
charges, as required by Section 226.16 of Regulation Z of the Code of Federal
Regulations, associated with the use of the attached check or draft. (3) Whether the
finance charges are triggered immediately upon the use of the check or draft.”
(Civ. Code, § 1748.9, subd. (a) (paragraphing omitted) (hereafter section 1748.9).)
In 2004, plaintiff sued MBNA on behalf of himself and similarly situated MBNA
customers, alleging that the bank engaged in unfair competition in violation of Business
and Professions Code section 17200 et seq. by failing to make the disclosures mandated
by section 1748.9. Plaintiff sought both monetary and injunctive relief. MBNA took the
position that the NBA and a now-superseded federal regulation, title 12 Code of Federal
Regulations part 7.4008(d) (2004) (hereafter former regulation 7.4008(d)), preempt the
state disclosure law. (Former regulation 7.4008(d) was superseded by a 2010 amendment
to 12 C.F.R. section 7.4008 promulgated after Congress enacted the Dodd-Frank Wall

Street Reform and Consumer Protection Act (Pub. L. No. 111-203 (July 21, 2010)
124 Stat. 1376) (hereafter Dodd-Frank Act).) After several years of litigation, MBNA
renewed a previously rejected motion for judgment on the pleadings in light of the 2008
decision by the United States Court of Appeals for the Ninth Circuit in Rose, which
involved different parties but the same factual and legal issues presented here. The Ninth
Circuit concluded that the NBA and former regulation 7.4008(d) preempt section 1748.9,
and it affirmed the district court‟s conclusion that the bank‟s failure to attach the
statutorily mandated disclosures to its convenience checks was not unlawful. (Rose,
supra, 513 F.3d at p. 1038.) Relying on Rose, the trial court granted MBNA‟s renewed
The Court of Appeal reversed. Applying Barnett Bank of Marion County, N.A.
v. Nelson(1996) 517 U.S. 25(Barnett Bank), the Court of Appeal concluded that the
NBA does not preempt section 1748.9 because the state law does not “significantly
impair” the power of national banks. According to the Court of Appeal, section 1748.9 is
a “generally applicable disclosure law” that does not forbid banks from making loans via
convenience checks. It “merely requires „clear and conspicuous‟ disclosures of three
items of information and requires those disclosures to be attached to the convenience
checks.” The Court of Appeal acknowledged that section 1748.9 “imposes someburden”
on national banks and that finding preemption would “establish clarity in the law.” But
the court said its task was “not to divine the best policy,” and it went on to hold that
“when a state disclosure requirement does not, on its face, forbid or significantly impair
national banks from exercising a power granted to it by Congress under the NBA,
national banks claiming preemption must make a factual showing that the disclosure
requirement significantly impairs the exercise of the relevant power or powers.” The
court concluded that “[s]ection 1748.9 does not, on its face, significantly impair federally
authorized powers under the NBA” and that “given the procedural posture of this case,

MBNA has not yet had an opportunity to submit evidence establishing a significant
The Court of Appeal further held that section 1748.9 was not preempted by former
regulation 7.4008(d). That regulation provided, in pertinent part, that “state laws that
obstruct, impair, or condition a national bank‟s ability to fully exercise. . lending
powers are not applicable to national banks. [¶]. . A national bank may make non-real
estate loans without regard to state law limitations concerning: [¶]. . [¶]. . 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.” (12 C.F.R. § 7.4008(d)(1), (2)(viii)
(2004).) The Court of Appeal held that “if valid, [former regulation 7.4008(d)] expressly
preempts section 1748.9,” and it further noted that the Office of the Comptroller of the
Currency (OCC) had properly promulgated the regulation through the notice and
comment procedure required for issuing a preemptive regulation under title 12 United
States Code section 43(a).
The Court of Appeal concluded, however, that “[t]he language of [former
regulation 7.4008(d)] does not suggest a reasonable attempt to describe and interpret the
reach of NBA preemption. [Citation.] Rather, the regulation exempts national banks
from all state disclosure requirements, even though. . the NBA. . [did not] express[]
an intention to create this bright line exemption.” Moreover, the Court of Appeal
reasoned, Congress failed to “delegate[] the power to [the] OCC to take „administrative
action whose sole purpose [is] to preempt state law rather than to implement a statutory
command.‟ (Watters[v. Wachovia Bank, N.A.(2007)] 550 U.S. [1,] 44 (dis. opn. of
Stevens, J.).)” Though “reluctant to create a split of authority [sic] with the Ninth
Circuit Court of Appeals on a point of federal law,” the Court of Appeal said it was
“require[d]. . to do so.”
We granted MBNA‟s petition for review.

A preemption “question is basically one of congressional intent. Did Congress, in
enacting the Federal Statute, intend to exercise its constitutionally delegated authority to
set aside the laws of a State? If so, the Supremacy Clause requires courts to follow
federal, not state, law.” (Barnett Bank, supra, 517 U.S. at p. 30, citing U.S. Const, art.
VI, cl. 2; see also Viva! Internat. Voice for Animals v. Adidas Promotional Retail
Operations, Inc.(2007) 41 Cal.4th 929, 935 (Viva! International).)
This court has recognized “four species of federal preemption: express, conflict,
obstacle, and field.” (Viva! International, supra, 41 Cal.4th at p. 935.) “First, express
preemption arises when Congress „define[s] explicitly the extent to which its enactments
pre-empt state law. [Citation.]. . .‟ [Citations.] Second, conflict preemption will be
found when simultaneous compliance with both state and federal directives is impossible.
[Citations.] Third, obstacle preemption arises when „ “under the circumstances of [a]
particular case, [the challenged state law] stands as an obstacle to the accomplishment
and execution of the full purposes and objectives of Congress.” ‟ [Citations.] Finally,
field preemption, i.e., „Congress‟ intent to pre-empt all state law in a particular area,‟
applies „where the scheme of federal regulation is sufficiently comprehensive to make
reasonable the inference that Congress “left no room” for supplementary state
regulation.‟ [Citation.]” (Id. at p. 936; accord, Bronco Wine Co. v. Jolly(2004)
33 Cal.4th 943, 955; see also Barnett Bank, supra, 517 U.S. at p. 31.) As explained
below, the main dispute in this case implicates the third type of preemption — that is,
whether section 1748.9 stands as an obstacle to the accomplishment and execution of the
NBA‟s purposes.
“Since mbna america credit card v. State of Maryland[citation], it has not been open to question
that the Federal Government may constitutionally create and govern [banks] within the
states.” (Franklin Nat. Bank of Franklin Square v. New York(1954) 347 U.S. 373, 375

(Franklin).) In Franklin, the high court considered whether a New York statute
prohibiting banks “from using the word „saving‟ or „savings‟ in their advertising or
business” ( p. 374) was preempted by the Federal Reserve Act, which authorized
national banks “ „to receive time and savings deposits‟ ” (Franklin, at p. 375, quoting
12 U.S.C. § 371), or by the NBA, which grants national banks “ „all such incidental
powers as shall be necessary to carry on the business of banking‟ ” (Franklin, at p. 376,
quoting 12 U.S.C. § 24, par. Seventh). Franklinheld that the state law was preempted,
explaining that “[w]e cannot believe that the incidental powers granted to national banks
should be construed so narrowly as to preclude the use of advertising in any branch of
their authorized business.” (Franklin, at p. 377.) Because Congress had authorized
national banks to “accept and pay interest on time deposits of people‟s savings. they
must be deemed to have the right to advertise that fact by using the commonly
understood description which Congress has specifically selected. We find no indication
that Congress intended to make this phase of national banking subject to local
restrictions, as it has done by express language in several other instances.” ( p. 378,
fn. omitted.)
In subsequent cases involving national bank legislation, the high court has found
preemption where compliance with federal and state law did not pose the kind of physical
impossibility that exists where federal law requiresbanks to do something that state law
prohibits. Following Franklin, the high court has repeatedly found a sufficient basis for
preemption where the federal banking statute provides “a broad, not a limited,
permission.” (Barnett Bank, supra, 517 U.S. at p. 32.) In Barnett Bank, the court
observed that the word “powers” is “a legal concept that, in the context of national bank
legislation, has a history. That history is one of interpreting grants of both enumerated
and incidental „powers‟ to national banks as grants of authority not normally limited by,
but rather ordinarily pre-empting, contrary state law.” (Ibid.) The court went on to say
that “where Congress has not expressly conditioned the grant of „power‟ upon a grant of

state permission, the Court has ordinarily found that no such condition applies. In
Franklin Nat. Bank, the Court made this point explicit. It held that Congress did not
intend to subject national banks‟ power to local restrictions, because the federal power-
granting statute there in question contained „no indication that Congress [so] intended. . .
as it has done by express languagein several other instances.‟ 347 U.S. at 378, and n. 7.”
(Barnett Bank, supra, 517 U.S. at p. 34.)
Barnett Bankapplied these principles to a Florida law providing that “banks
cannot sell insurance in Florida — except that an unaffiliatedsmall town bank (i.e.,a
bank that is not affiliated with a bank holding company) may sell insurance in a small
town.” (Barnett Bank, supra, 517 U.S. at p. 29.) The federal law at issue said that
“ „any‟ ” national bank operating in a small town “ „may. . act as the agent for any fire,
life, or other insurance companyauthorized by the authorities of the State. . to do
business [there]. by soliciting and selling insurance. . .‟ ” ( p. 28, citing Act of
Sept. 7, 1916, 39 Stats. 753, as amended, 12 U.S.C. § 92, alterations except final ellipsis
in original.) The court held the state law preempted, explaining that “[t]he Federal
Statute before us, as in Franklin Nat. Bank, explicitly grants a national bank an
authorization, permission, or power. And, as in Franklin Nat. Bank, it contains no
„indication‟ that Congress intended to subject that power to local restriction.” (Barnett
Bank, supra, 517 U.S. at pp. 34-35.)
In reaching this conclusion, the high court observed that a federal grant of power
to national banks does not preempt state law where there is “an explicit statement that the
exercise of that power is subject to state law” (Barnett Bank, supra, 517 Mbna america credit card. at p. 34) or
where the state law “does not prevent or significantly interfere with the national bank‟s
exercise of its powers” ( p. 33). Although “normally Congress would not want
States to forbid, or to impair significantly, the exercise of a power that Congress
explicitly granted,” federal banking laws do not preempt state laws that do not
significantly impair a national bank‟s exercise of its congressionally authorized powers.

(Ibid.) In 2010, the Dodd-Frank Act codified the significant impairment test articulated
in Barnett Bank. (See 12 U.S.C. § 25b (b)(1)(B) [declaring state consumer financial laws
preempted if “in accordance with the legal standard for preemption in the decision of the
Supreme Court of the United States in [Barnett Bank] the State consumer financial
law prevents or significantly interferes with the exercise by the national bank of its
The high court affirmed and elaborated on these principles in Watters v. Wachovia
Bank, N.A., supra, 550 U.S. 1(Watters). There, the court considered Michigan statutes
requiring “mortgage brokers, lenders, and servicers that are subsidiaries of national banks
to register with the State‟s Office of Financial and Insurance Services. . and submit to
state supervision.” ( p. 8, citing Mich. stats.) It was undisputed that under the NBA
“Michigan‟s licensing, registration, and inspection requirements cannot be applied to
national banks” themselves. (Watters, supra, 550 U.S. at p. 15; see p. 13, quoting
12 U.S.C. § 484(a) [“ „No national bank shall be subject to any visitorial powers except
as authorized by Federal law.‟ ”].) The question was whether Michigan‟s regulatory
regime survived preemption as applied to operating subsidiaries of national banks. The
court held that it did not, relying on federal statutes and regulations authorizing operating
subsidiaries to “engage only in activities national banks may engage in directly, „subject
to the same terms and conditions that govern the conduct of such activities by national
banks.‟ ” (Watters, supra, 550 U.S. at p. 16, quoting Gramm-Leach-Bliley Act, § 121
(a)(2), 113 Stats. 1378, codified at 12 U.S.C. § 24a(g)(3)(A); see also Watters, supra, 550
U.S. at pp. 15-16, 20-21 [relying on OCC regulations].) Except where federal law
provides otherwise, the court explained, “we have treated operating subsidiaries as
equivalent to national banks with respect to powers exercised under federal law” (
p. 18), including the NBA‟s grant of power “to engage in real estate lending” (Watters,
supra, 550 U.S. at p. 7, citing 12 U.S.C. § 371) and “ „all such incidental powers as shall
be necessary to carry on the business of banking‟ ” (Watters, supra, 550 U.S. at p. 7,

quoting 12 U.S.C. § 24, par. Seventh). Because the Michigan statutes would interfere
with the business of banking conducted by operating subsidiaries just as much as it would
interfere with such business conducted by national banks themselves, the NBA
preempted the state regulatory regime whether applied to national banks or to their
operating subsidiaries. (Watters, supra, 550 U.S. at pp. 17-19.)
Summarizing the principles established in Franklinand Barnett Bank, the high
court in Watterssaid: “In the years since the NBA‟s enactment, we have repeatedly
made clear that federal control shields national banking from unduly burdensome and
duplicative state regulation. [Citations.]. . [¶] We have „ “interpret[ed] grants of both
enumerated and incidental „powers‟ to national banks as grants of authority not normally
limited by, but rather ordinarily pre-empting, contrary state law.” [Citations.] States are
permitted to regulate the activities of national banks where doing so does not prevent or
significantly interfere with the national bank‟s or the national bank regulator‟s exercise of
its powers. But when state prescriptions significantly impair the exercise of authority,
enumerated or incidental under the NBA, the State‟s regulations must give way.‟ ”
(Watters, supra, 550 U.S. at pp. 11-12.)
Moreover, in explaining why the Michigan supervisory regime could not apply to
national banks and their operating subsidiaries, the high court in Watterssaid that were it
otherwise, “[n]ational banks would be subject to registration, inspection, and enforcement
regimes imposed not just by Michigan, but by all States in which the banks operate.
Diverse and duplicative superintendence of national banks‟ engagement in the business
of banking, we observed over a century ago, is precisely what the NBA was designed to
prevent: „Th[e] legislation has in view the erection of a system extending throughout the
country, and independent, so far as powers conferred are concerned, of state legislation
which, if permitted to be applicable, might impose limitations and restrictions as various
and as numerous as the States.‟ [Citation.] Congress did not intend, we explained, „to
leave the field open for the States to attempt to promote the welfare and stability of

national banks by direct legislation. . [C]onfusion would necessarily result from
control possessed and exercised by two independent authorities.‟ ” (Watters, supra, 550
U.S. at pp. 13-14, fn. omitted; see also pp. 17-18 [“[J]ust as duplicative state
examination, supervision, and regulation would significantly burden mortgage lending
when engaged in by national banks, so too would those state controls interfere with that
same activity when engaged in by an operating subsidiary.”].)
Applying the principles above, we conclude that the NBA preempts section
1748.9. As noted, the NBA broadly authorizes national banks to exercise “all such
incidental power as shall be necessary to carry on the business of banking.” (12 U.S.C.
§ 24, par. Seventh.) This broad power expressly includes “loaning money on personal
security.” (Ibid.) The disclosure requirements in section 1748.9 impose a condition on
the federally authorized power of national banks to loan money on personal security.
Those requirements say that national banks like MBNA may offer credit in the form of
convenience checks so long as the checks contain specific disclosures. But here, as in
Barnett Bank, the federal statute does not grant national banks a “limitedpermission, that
is, permission to [loan money on personal security] to the extent that state law also grants
permission to do so.” (Barnett Bank, supra, 517 U.S. at p. 31.) Instead, federal law
authorizes national banks to loan money on personal security with “no „indication‟ that
Congress intended to subject that power to local restriction.” ( p. 35, quoting
Franklin, supra, 347 U.S. at p. 378.)
The specific disclosure obligations imposed by section 1748.9 exceed any
requirements in federal law. The requirement in section 1748.9 that disclosures appear
“on the front of an attachment that is affixed by perforation or other means to the
preprinted check or draft” has no counterpart in federal law. The same is true of section
1748.9‟s requirement that precise language (“use of the attached check or draft will
constitute a charge against your credit account”) appear on each check. (§ 1748.9, subd.

(a)(1).) In addition, although federal regulations require certain disclosures when the
terms of using a convenience check differ from the terms of the customer‟s credit account
(12 C.F.R. § 226.9(b)(1), (2)), they do not mandate that every convenience check disclose
“[w]hether the finance charges are triggered immediately upon use of the check,” as
section 1748.9, subdivision (a)(3) requires. Furthermore, although section 1748.9,
subdivision (a)(2) mandates disclosure of interest rates and finance charges “as required
by Section 226.16 of Regulation Z of the Code of Federal Regulations,” that federal
regulation pertains to “advertising” (see 12 C.F.R. § 226.16) and arguably does not apply
to convenience check offers.
In characterizing the disclosure requirements of section 1748.9, the Court of
Appeal said that the statute “does not forbidthe exercise of a banking power authorized
by the NBA. Section 1748.9 does not bar national banks from loaning money on
personal security through convenience checks.” It is true that section 1748.9, unlike the
state law in Barnett Bankthat prohibited national banks from selling insurance in small
towns, does not outlaw a category of banking activity. However, to say that MBNA may
offer convenience checks so long asit complies with section 1748.9 is equivalent to
saying that MBNA maynotoffer convenience checks unlessit complies with section
1748.9. Whether phrased as a conditional permission or as a contingent prohibition, the
effect of section 1748.9 is to forbid national banks from offering credit in the form of
convenience checks unless they comply with state law. As demonstrated by the instant
lawsuit brought under California‟s unfair competition law (Bus. & Prof. Code, § 17200 et
seq.), a national bank may be subject to monetary liability, and its convenience check
offers may be enjoined, if it does not comply.
Requiring compliance with section 1748.9 as a condition of “loaning money on
personal security” (12 U.S.C. § 24, par. Seventh) through convenience checks
“significantly impair[s] the exercise of authority” granted to national banks by the NBA
(Watters, supra, 550 U.S. at p. 12). Section 1748.9 prescribes the contentof the

disclosures by specifying what must be disclosed on each convenience check. Section
1748.9 prescribes specific languagethat a credit card issuer must use (“use of the
attached check or draft will constitute a charge against your credit account”). (§ 1748.9,
subd. (a)(1).) In addition, section 1748.9 prescribes the mannerand formatof the
disclosures: the disclosures must appear “on the front of an attachment,” the attachment
must be “affixed by perforation or other means to the preprinted check,” and the
disclosures must appear “in clear and conspicuous language.” These requirements as to
the content, language, manner, and format of disclosures seem no less prescriptive than
the New York law in Franklinthat prohibited banks other than the state‟s own chartered
savings institutions from using the word “saving” or “savings” in their advertisements or
business. (See Franklin, supra, 347 U.S. at p. 374 fn. 1, citing N.Y. stat.) The New York
law did not bar national banks from receiving deposits or soliciting deposits through
advertisements. It simply required national banks operating in New York to use other
words to entice people to deposit their money for safe-keeping and to describe the
business of protecting, growing, and lending those deposits. (See Franklin, at p. 378
[“[The state] does not object to national banks taking savings deposits or even to their
advertising that fact so long as they do not use the word „savings.‟ ”].) Nevertheless, the
high court held that the state law impermissibly interfered with the federally authorized
business of national banks. (See pp. 377-378.)
Moreover, even if California‟s disclosure requirements by themselves do not seem
particularly onerous, the high court in Wattersmade clear that our preemption analysis
must consider the burden of disclosure “regimes imposed not just by [California], but by
all States in which the banks operate.” (Watters, supra, 550 U.S. at p. 13.) If disclosure
requirements such as those in section 1748.9 were allowed to stand, national banks
operating in multiple states would face the prospect of “ „limitations and restrictions as
various and as numerous as the States.‟ [Citation.]” ( p. 14.) National banks would
have to monitor requirements as to the content, language, manner, and format of

disclosures for each of the 50 states (and possibly municipalities as well), and continually
adjust their convenience check offers to comply with the prescriptions of each local
jurisdiction. Such “[d]iverse and duplicative [regulation] of national banks‟ engagement
in the business of banking. . is precisely what the NBA was designed to prevent.” (Id.
at pp. 13-14.) Congress intended national banks to have broad power to engage in the
“business of banking” by “loaning money on personal security” (12 U.S.C. § 24, par.
Seventh), and that power would be significantly impaired if national banks had to comply
with a diverse or duplicative patchwork of local disclosure requirements.
Plaintiff contends that the phrase “subject to law” in the federal banking statute
means that Congress intended state laws like section 1748.9 to apply to national banks.
(See 12 U.S.C. § 24, par. Seventh [authorizing national banks “[t]o exercise by its board
of directors or duly authorized officers or agents, subject to law, all such incidental
powers as shall be necessary to carry on the business of banking” (italics added)].) But
plaintiff‟s reading of the phrase “subject to law” cannot be squared with the consistent
line of high court precedent broadly construing the preemptive force of the NBA absent
express language that makes a federal banking power subject to state law. (See ante, at
pp. 6-7.) Plaintiff‟s textual argument contravenes the high court‟s “history. . of
interpreting grants of both enumerated and incidental „powers‟ to national banks as grants
of authority mbna america credit card normally limited by, but rather ordinarily pre-empting, contrary state
law.” (Barnett Bank, supra, 517 U.S. at p. 32.)
Plaintiff further contends that section 1748.9 is a state law of “general
application,” akin to state contract law, from which national banks are not exempt unless
federal law expressly provides. (See Watters, supra, 550 U.S. at p. 11.) But section
1748.9 is quite different from the kind of state contract law we have previously upheld
against preemption challenge. In Perdue v. Crocker National Bank(1985) 38 Cal.3d
913, 932-944 (Perdue), we examined whether federal banking laws preempted California

law prohibiting unreasonable charges or unconscionable contracts as applied to bank
charges on checks drawn against insufficient funds. In finding no preemption, we said
that “Congress clearly anticipated that banks would be able to charge fees for depositor
services sufficient to recover the cost of such services.” ( pp. 942-943.) The state
laws at issue were consistent with Congress‟s intent, we explained, because they “permit
the bank to charge fees sufficient to recover the cost of the services and a reasonable
profit.” ( p. 943.) Importantly, we observed that the state laws “are part of the
common law governing all commercial transactions; they regulate not only sale of bank
services but the sale of groceries, automobiles, furniture or medical services.” (Ibid.) We
found no indication that Congress sought to authorize banks to charge more for depositor
services than what they could charge in a “free and competitive market” with state law
doctrines against unreasonable charges or unconscionable contracts comprising part of
the background law “applicable to all. . commercial operations.” (Ibid.) Perdueis
consistent with other banking cases that have rejected preemption arguments on the
ground that the state laws at issue were laws of general applicability. (See McClellan v.
Chipman(1896) 164 U.S. 347, 358[“No function of such banks is destroyed or
hampered by allowing the banks to exercise the power to take real estate, provided only
they do so under the same conditions and restrictions to which all the other citizens of the
state are subjected. . .”]; National Bank v. Commonwealth(1870) 76 U.S. (9 Wall.) 353,
362 [contracts made by national banks “are governed and construed by State laws”].)
Section 1748.9 is not a generally applicable law similar to California‟s law against
unconscionable contracts. It is a law specifically directed at “credit card issuer[s]” mbna america credit card at
offers of “credit to a cardholder through the use of a preprinted check or draft.” (Ibid.)
Section 1748.9 does not state a background legal principle against fraudulent, deceptive,
or unconscionable practices. It prescribes specific and affirmative conduct that credit
card issuers must undertake if they wish to lend money through convenience checks.
Unlike the state law considered in Perdue, the disclosure requirements of section 1748.9

cannot be understood as part of the general legal backdrop to Congress‟s enactment of
federal banking legislation.
To be sure, section 1748.9 is a generally applicable law in the sense that it applies
equally to all credit card issuers and does not discriminate against national banks. That
distinguishes section 1748.9 from the New York law at issue in Franklin, for example,
which directed its prohibition on use of the word “savings” at non-state-chartered banks.
(See Franklin, supra, 347 U.S. at p. 374 and fn. 1.) However, Franklin‟s preemption
analysis did not emphasize or even mention the discriminatory aspect of the state law; the
high court simply observed that the state law unduly limited the incidental power of
national banks to advertise. ( pp. 377-378.) Similarly, although the Florida law in
Barnett Bankallowed only small town banks unaffiliated with a holding company to sell
insurance in small towns, the high court indicated that its holding would be the same even
if the state law had prohibited all banks from selling insurance in small towns. (Barnett
Bank, supra, 517 U.S. at p. 37 [“[T]he Federal Statute means to grant small town national
banks authority to sell insurance, whether or not a State grants its own state banks or
national banks similar approval.”].)
Moreover, as Fidelity Federal Savings & Loan Association v. de la Cuesta(1982)
458 U.S. 141(de la Cuesta) shows, state laws that restrict federally authorized banking
powers may be preempted even if they are nondiscriminatory. In de la Cuesta, the high
court examined federal and state law governing the exercise of a due-on-sale clause, “a
contractual provision that permits the lender to declare the entire balance of a loan
immediately due and payable if the property securing the loan is sold or otherwise
transferred.” ( p. 145.) Under California law, exercise of a due-on-sale clause
violates the state prohibition of unreasonable restraints on alienation “ „unless the lender
can demonstrate that enforcement is reasonably necessary to protect against impairment
to its security or the risk of default.‟ ” ( p. 149, quoting Wellenkamp v. Bank of
America(1978) 21 Cal.3d 943, 953.) The California rule applied to all lenders, not just

to national banks. Yet the high court held that it was preempted by a federal regulation
authorizing a federal savings and loan association “ „at its option‟ ” to exercise a due-on-
sale clause. ( p. 147, quoting federal regulation.) Although the federal regulation
did not compel savings and loan associations to use or enforce due-on-sale clauses, it was
enough that the California rule “deprived the lender of the „flexibility‟ given it by the
[federal regulation].” ( p. 155.) Similarly here, section 1748.9 restricts the broad
permission that federal law gives to national banks to engage in the “business of banking”
by “loaning money on personal security.” (12 U.S.C. § 24, par. Seventh.) The
impairment of a national bank‟s exercise of its federally authorized power is not lessened
by the fact that section 1748.9 applies to all credit card issuers, not just national banks.
(See Watters, supra, 550 U.S. at p. 11 [“Federally chartered banks are subject to state
laws of general application in their daily business to the extent such laws do not conflict
with the letter or the general purposes of the NBA.” (Italics added.)].)
To conclude that section 1748.9 is preempted does not mean that all state laws that
specifically regulate banking activities are preempted. For example, in Anderson
National Bank v. Luckett(1944) 321 U.S. 233, the high court held that national banking
laws did not preempt a Kentucky statute authorizing the state to take custody of
abandoned bank deposits. In addition to noting that the state law applied to “state and
national banks alike” ( p. 247), the court explained: “Under the statute the state
merely acquires the right to demand payment of the accounts in the place of the
depositors. Upon payment of the deposits to the state, the bank‟s obligation is
discharged. Something more than this is required to render the statute obnoxious to the
federal banking laws. For an inseparable incident of a national bank‟s privilege of
receiving deposits is its obligation to pay them to the persons entitled to demand payment
according to the law of the state where it does business. A demand for payment of an
account by one entitled to make the demand does not infringe or interfere with any
authorized function of the bank.” ( pp. 248-249.) In other words, the Kentucky law

authorized “a change in the dominion over [abandoned] accounts. . .to which the bank
must respond by payment of them on lawful demand. But this. . is nothing more than
performance of a duty by the bank imposed by the federal banking laws, and not a denial
of its privileges as a federal instrumentality.” ( p. 252.) Moreover, because of
procedures ensuring that “[e]scheat or forfeiture to the state” occurred “only on proof of
abandonment in fact,” the state law could not be said to “deter [depositors] from placing
their funds in national banks in that state.” (Ibid.)
The Kentucky statute in Anderson National Bank v. Luckettis an example of a
state banking law that does not significantly impair the exercise of a national bank‟s
federally authorized power. As the high court explained, the state law transferred
ownership of abandoned accounts without affecting a national bank‟s prerogative to
receive deposits or its obligation to pay upon lawful demand. The state law did not
annul, condition, restrict, hamper, or otherwise limit the powers of a national bank. The
same cannot be said of section 1748.9. Because section 1748.9 “ „ “stands as an obstacle
to the accomplishment and execution of the full purposes and objectives” ‟ ” of the NBA,
it is preempted. (Viva! International, supra, 41 Cal.4th at p. 936.)
Concluding that “[s]ection 1748.9 does not, on its face, significantly impair
federally authorized powers under the NBA,” the Court of Appeal held that “national
banks claiming preemption must make a factual showing that the disclosure requirement
significantly impairs the exercise of the relevant power or powers.” After stating this
requirement of factual proof, the Court of Appeal said “[w]e need not elucidate a precise
„yardstick for measuring when a state law “significantly interferes with”. . the exercise
of national banks‟ powers.‟ [Citation.]” We believe the Court of Appeal‟s approach is
unsupported by preemption case law and unworkable in practice.

In Franklin, supra, 347 U.S. 373, the court did not examine record evidence
before concluding that the state prohibition on using the word “savings” significantly
impaired the ability of national banks to advertise. And in Watters, supra, 550 U.S. 1, the
court did not undertake an evidentiary inquiry before concluding that the state registration
and supervision regime significantly impaired the real estate lending powers of national
banks and their operating subsidiaries. (See Watters, 550 U.S. at p. 35 (dis. opn. of
Stevens, J.) [“There is no evidence. . that compliance with the Michigan statutes
imposed any special burdens on Wachovia Mortgage‟s activities. . .”].) The Court of
Appeal cited our decision in Perdue, where we held on the pleadings that the state law
survived preemption and then said that “conceivablyinformation not contained in the
pleadings mightlead to a different conclusion.” (Perdue, supra, 38 Cal.3d at p. 943,
italics added; see pp. 943-944 [“We cannot presume, without evidence, that
prohibiting a national bank from setting unreasonable prices or enforcing an
unconscionable contract will render that bank less efficient, less competitive or less able
to fulfill its function in a national banking system.”].) But Perdue‟s speculative
statement was dicta, and we know of no case decided by our court or by the United States
Supreme Court in which the issue of preemption turned on whether a national bank made
an adequate factual showing that state law significantly impaired its federally authorized
That the Court of Appeal declined to “elucidate a precise „yardstick for
measuring‟ ” significant impairment suggests the impracticality of this approach. As
amici curiae American Bankers Association and California Bankers Mbna america credit card explain:
“If the yardstick consists of a cost threshold for the specific state law, the law might be
preempted as applied to some banks but not others, as banks with more expansive
convenience-check activities are able to evidence higher costs. If, in contrast, the
yardstick focuses on costs in proportion to the size of the bank, the law might be
preempted as to smaller banks but not larger banks. In fact, preemption outcomes might

change over time for a specific bank, as it expands its operations. Preemption rulings
based on „factual evidence‟ for a particular defendant bank therefore will have little value
— even for a single bank — much less for many or all national banks.
“Additionally, the new evidentiary requirement will make it very difficult for
national banks to predict, in advance, with which state laws they must comply. Even
where one national bank has litigated the applicability of the precise state law at issue,
other national banks will not be able to rely on the outcome of that litigation because the
inquiry will vary depending on the particular operations of the bank and the factual
showing made. A national bank that believes it has been subjected to a preempted law
will be forced to initiate a lawsuit and submit its ownevidence, to prove significant
impairment of its ownoperations. Otherwise, absent such a lawsuit, the bank would have
to monitor, analyze, and comply with state laws that may in fact be preempted. . .”
Here, we conclude as a matter of law that the NBA preempts the disclosure requirements
in section 1748.9.
Because we find section 1748.9 preempted by the NBA, we express no view on
whether section 1748.9 is also preempted by former regulation 7.4008(d).


The judgment of the Court of Appeal is reversed and the matter remanded for
further proceedings.


Associate Justice, Court of Appeal, Fifth Appellate District, assigned by the Chief
Justice pursuant to article VI, section 6 of the California Constitution.

See next page for addresses and telephone numbers for counsel who argued in Supreme Court. Name of OpinionParks v, MBNA America Bank, N.A.

Unpublished Opinion

Original Appeal
Original Proceeding
Review Granted
XXX 184 Cal.App.4th 652
Rehearing Granted


Opinion No.

Date Filed:June 21, 2012


Judge:Gail Andrea Andler



Rosner & Mansfield, Law Office of Michael R. Vachon and Michael R. Vachon for Plaintiff and Appellant.

Arbogast & Berns, David M. Arbogast; Spiro Moss and J. Mark Moore for Consumer Attorneys of California as
Amicus Curiae on behalf of Plaintiff and Appellant.

Edmund G. Brown, Jr., and Kamala D. Harris, Attorneys General, Manuel M. Medeiros, State Solicitor General,
Frances T. Grunder, Assistant Attorney General, Kathrin Sears and Sheldon H. Jaffe, Deputy Attorneys General, for
People of the State of California as Amicus Curiae on behalf of Plaintiff and Appellant.

Arnold & Proctor, Nancy L. Perkins, Laurence J. Hutt, Teri R. Richardson and Christopher S. Tarbell for Defendant
and Respondent.

Morrison & Foerster, James R. McGuire, Rita F. Lin and Aaron D. Jones for American Bankers Association and
California Bankers Association as Amici Curiae on behalf of Defendant and Respondent.

Sullivan & Cromwell, Bruce E. Clark, H. Rodgin Cohen, Michael M. Wiseman and Achyut J. Phadke for The
Clearing House Association L.L.C. as Amicus Curiae on behalf of Defendant and Respondent.

Horace G. Sneed and Douglas B. Jordan for the Office of the Comptroller of the Currency Administrator of National
Banks, upon the request of the Court of Appeal.

Counsel who argued mbna america credit card Supreme Court (not intended for publication with opinion):

Michael R. Vachon
Law Office of Michael R. Vachon
17150 Via Del Campo, Suite 302
San Diego, CA 92127
(858) 674-4100

Sheldon H. Jaffe
Deputy Attorney General
455 Golden Gate Avenue, Suite 11000
San Francisco, CA 94102
(415) 703-5389

Laurence J. Hutt
Arnold & Proctor
777 South Figueroa Street, 44th Floor
Los Angeles, CA 90017-5844
(213) 243-4000

Petition for review after the Court of Appeal reversed the judgment in a civil action. This case presents the following issues: (1) Is Civil Code section 1748.9, which requires credit card issuers to make certain disclosures on checks issued to cardholders for cash advances from the cardholders’ credit card accounts, preempted by the National Bank Act (12 U.S.C. § 21 et seq.)? (2) Is 12 Code of Federal Regulations section 7.4008, which was promulgated under the National Bank Act by the Office of the Comptroller of the Currency and which provides that state laws that impair a nationally chartered bank’s non real-estate banking powers are not applicable to nationally chartered banks, a valid regulation?

Opinion Information
Date:Citation:Docket Number:
Thu, 06/21/201254 Cal. 4th 376, 278 P.3d 1193, 142 Cal. Rptr. 3d 837S183703

Jun 11, 2013
Annotated by Jonathan Mayer


Many credit card issuers supply “convenience checks” as an alternative method of payment. When a business does not accept a particular card, the customer can complete his or her purchase with a convenience check instead. The transaction is then automatically passed through to the cardholder’s account. Customers may not, however, expect the fees and interest associated with using a convenience check. In 1999 the California legislature responded by requiring that a set of mandatory disclosures be printed on convenience checks, codified at Civil Code Section 1748.9.

MBNA America Bank, the largest credit card issuer in the United States, failed to provide the required disclosures on its courtesy checks. This class action was brought in 2004 under California’s unfair competition law, Civil Code Section 17200, on behalf of millions of California cardholders who had used MBNA convenience checks. (The named plaintiff, Allan Parks, bought holiday gifts and made bill payments in 2003 with MBNA convenience checks.) The class sought both monetary damages and injunctive relief.

MBNA argued that the state law disclosure requirements were preempted by federal law, either by constituting an obstacle to the National Bank Act (NBA), or by falling within a since-superseded regulation issued by the Office of the Comptroller of the Currency (OCC), 12 C.F.R. § 7.4008(d), that expressly preempted certain state lending disclosure requirements.

Procedural History

This case was filed in the Superior Court of Orange County in 2004. The trial court initially denied MBNA’s motion for judgment on the pleadings, requiring a factual showing of burden on the bank before finding federal preemption.

While litigation was ongoing in the trial court, the United States Court of Appeals for the Ninth Circuit handed down Rose v. Chase Bank USA, N.A., 513 F.3d 1032 (2008). Rose involved a nearly-identical convenience check fact pattern, unfair competition claim, and class posture, except filed in the federal courts and against Chase. The three-judge panel in Rose concluded that California’s mandatory disclosure law was preempted by both the NBA and the OCC regulation.

MBNA renewed its motion for judgment on the pleadings. The trial court then followed Rose and dismissed the case in June 2008. Parks promptly appealed.

A three-judge panel of the Fourth District Court of Appeals, Division Three, unanimously reversed in March 2010. Parks v. MBNA America Bank, N.A., 184 Cal. App. 4th 652 (2010). The state appellate court expressed reluctance to create a split of authority with the Ninth Circuit. After conducting its own examination of controlling precedent from the Supreme Court of the United States and the Supreme Court of California, however, the court disagreed with both of the Ninth Circuit’s holdings. It found that that the NBA does not necessarily preempt California’s courtesy check law and that the OCC’s regulation exceeded the agency’s statutory authority. The court left open the possibility that MBNA could develop a factual record of conflict between federal and state law. MBNA appealed to the Supreme Court of California.

In mid-2010 Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act, a comprehensive reworking of federal banking law. One provision of Dodd-Frank, codified at 12 U.S.C. § 25b, amended the National Bank Act to expressly provide a standard for federal preemption of state law as applied to national banks.

Oral arguments were held on May 29, 2012, and the court issued its opinion on June 21. Parks subsequently appealed to the Supreme Court of the United States, which denied his petition for a writ of certiorari.


First, does the National Bank Act preempt California’s courtesy check disclosure statute? Second, was the Office of the Comptroller of the Currency’s lending disclosure preemption regulation properly authorized and promulgated?


The court unanimously held that California’s courtesy check disclosure statute is preempted as an obstacle to the National Bank Act. The court declined to address the Office of the Comptroller of the Currency’s since-superseded lending disclosure regulation.


In the narrowest reading, the court resolved a split in authority involving a common fact pattern and regarding the validity of a state statute. California’s credit card courtesy check disclosure requirements, Civil Code Section 1748.9, are now preempted in both the state and federal courts.

The court’s unanimous opinion includes a detailed recounting and synthesis of Supreme Court guidance on national bank preemption. Several points of reasoning work far-reaching consequences for California’s ability to regulate national banks.

First, the court acknowledges Congress’s policy, as understood by the Supreme Court in Barnett Bank and progeny, is to establish near-uniform national banking law. Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25, 30-37 (1996). State law may not “significantly impair” the statutory functions of a national bank. Watters v. Wachovia Bank, N.A., 550 U.S. 1, 10-15 (2007). Mandatory disclosures are generally invalid, especially where they prescribe manner and formatting. Franklin National Bank of Franklin Square v. New York, 347 U.S. 373, 377-79 (1954).

Second, generally applicable state law receives no special deference in preemption analysis. Barnett Bank, 517 U.S. at 37. A principle of ordinary state contract law, for example, may be preempted as applied to the national banks. Fidelity Federal Savings & Loan Association v. de la Cuesta, 458 U.S. 141, 152-59 (1982).

Third, in considering the burden of a regulation, courts should weigh the hypothetical of other states adopting duplicative or divergent requirements. Minor burdens under California law are magnified to potential nationwide burdens for purposes of preemption analysis.

Fourth, a bank need not produce evidence of actual burden to invalidate state law; the possibility of a significant burden is enough. Judgment on the pleadings will often be available to national banks claiming preemption against state law.

Last, the court reads the Dodd-Frank Act to codify Supreme Court precedent on NBA preemption and not enact a relaxed standard that allows more room for state law. (Since the court does not indicate whether Dodd-Frank has retroactive effect, this component of its reasoning could be considered dicta.)

Taken together, these principles of law sharply narrow California’s ability to intervene in the national banks.


Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”): A federal law enacted in 2010 that made sweeping changes to federal financial services law, including the National Bank Act.

National Bank Act (“NBA”): A term of art for the set of federal statutes that authorize and regulate national banks. Originally enacted as the National Banking Acts of 1863 and 1864.

Obstacle Preemption: See preemption.

Office of the Comptroller of the Currency (“OCC”): An agency within the Department of the Treasury that is responsible for regulating national banks.

Preemption: When federal law supersedes state law. There are four species of preemption: when Congress expressly preempts state law (“express”), when compliance with both federal and state law is not possible (“conflict”), when state law frustrates the purposes of federal law (“obstacle”), and when Congress so thoroughly regulates an area as to imply there is no room left for the states (“field”).

Judgment on the Pleadings: When a court is able to resolve a legal dispute using initial filings, without resorting to any fact finding. Judgment on the pleadings is a crucial stage of litigation: pre-trial discovery can be burdensome, costly, and time-consuming.

Split of Authority: When courts reach conflicting holdings, particularly exacerbated at the appellate level where lower courts are subsequently bound to reach further conflicting holdings. Authority splits are most commonly discussed in the context of the federal appellate circuits (a “circuit split”). The rules of both the Supreme Court of the United States and the Supreme Court of California indicate review is more likely if a case involves a split of authority. In Parks, there was a split of authority between a state appellate court and a federal appellate court.

State Preemption: See preemption.

Unfair Competition Law (“UCL”): A set of California statutes that prohibit unfair business practices and provide for both private and government remedies. In this case, the plaintiff class used the UCL as a cause of action for enforcing a separate provision of California law.


Final Verdict

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