Term: 2002
Docket: 02-306
Beneficial National Bank, Et Al. v. Marie Anderson Et Al.
- Pro
02-306 BENEFICIAL NATIONAL BANK v. ANDERSON Ruling below: CA 11, 287 F.3d 1038. QUESTION PRESENTED This Court has long held that section 30 of the National Bank Act, 12 U.S.C. §§ 85- 86, creates an exclusive federal cause of action and an exclusive federal remedy for usury claims by borrowers against national banks, preempting state law under the doctrine of ordinary preemption. Borrowers filed this case against a national bank in state court, claiming violation of state usury law, and the national bank removed the case to federal district court, where a motion to remand was denied. On interlocutory appeal, the United States Court of Appeals for the Eleventh Circuit ordered the district court to remand the case to state court for lack of subject matter jurisdiction and explicitly disagreed with decisions by the United States Court of Appeals for the Eighth Circuit holding that section 30 completely preempts state usury claims against national banks and thus permits removal of cases asserting state usury laws against them. The question presented is: Whether a usury claim against a national bank, even if ostensibly brought under state law, necessarily arises under section 30 of the National Bank Act so as to permit a federal court to exercise removal jurisdiction under the doctrine of complete preemption, a question as to which the United States Courts of Appeals are in conflict? CERT. GRANTED: 1/24/03 Expedited briefing schedule.
In the case of Beneficial National Bank v. Marie Anderson et al., 2002, the U.S. Supreme Court ruled that federal law preempts state-law usury claims against nationally chartered banks. The plaintiffs, Alabama residents who had taken out loans with Beneficial National Bank (a national bank), alleged that they were charged excessively high interest rates in violation of Alabama's usury laws and sought damages under a state consumer-protection statute. However, the court held that such claims are preempted by Section 85 of the National Bank Act which allows national banks to charge interest at the maximum rate permitted by their home states regardless of where their customers reside or where loans are made. This decision affirmed a key principle: when it comes to setting interest rates for nationally chartered banks, only federal law applies.
In the dissenting opinion for Beneficial National Bank v. Marie Anderson, Justice Stevens argued that state courts should have concurrent jurisdiction over cases involving usury claims against national banks. He contended that the majority's decision to allow only federal courts to hear such cases was inconsistent with historical precedent and could potentially limit consumers' access to justice. Furthermore, he expressed concern about the potential impact of this ruling on states' rights and their ability to regulate banking practices within their borders. He also disagreed with the majority's interpretation of certain provisions in the National Bank Act, arguing that they did not clearly preclude state court jurisdiction over these types of disputes.
