In Aguayo v. U.S. Bank, — F.3d —-, 2011 WL 3250465 (9th Cir. 2011), the Court of Appeals for the Ninth Circuit held that the National Bank Act did not pre-empt the Rees-Levering Automobile Sales Finance Act as to disclosures required in Notice of Intent to Dispose (“NOI”) letters. The Court of Appeals explained:
Despite all the foregoing, U.S. Bank insists the challenged sections of the Rees– Levering Act do not fall under the umbrella of its “right to collect debts.” 12 C.F.R. § 7.4008(e)(4). Nothing could be further from the truth-U.S. Bank chose to use its right of self-help repossession under California state law to repossess Aguayo’s car. The bank notified Aguayo of the debt due, with general instructions on ways to repay the debt, closely, but not completely, tracking Rees– Levering’s specific requirements. Now that it has sold Aguayo’s car, U.S. Bank wishes to collect the remainder of the debt, yet now claims that while it could act under color of state law, or at least the uniform provisions of the UCC, in repossessing Aguayo’s car, it no longer needs to comply with state law in collecting the remaining debt owed. We disagree. Section 2983.2 of the Rees– Levering Act is a state law, directed toward a lender’s debt collection, requiring that the lender inform the borrower of the full amount of his or her “indebtedness evidenced by the contract” or “liability,” Cal. Civ.Code § 2983.2(a)(1), (8), and therefore falls squarely within the OCC savings clause. U.S. Bank’s final argument is that the introduc-tory language of the savings clause (state laws “apply to national banks to the extent that they only inciden-tally affect the exercise of national banks’ non-real estate lending powers”) precludes application of the clause because the Rees– Levering provisions do more than “incidentally affect” lending powers. Specifically, because the Rees– Levering provision bars U.S. Bank from recovering a deficiency for failing to comply with the Rees– Levering notice require-ments, the Act “affects the very core of U.S. Bank’s lending operations.” While it is true the Rees– Levering provisions affect U.S. Bank in some ways, we do not agree that they affect the bank’s lending operations. There is no loan at this juncture, but merely an outstanding debt U.S. Bank has sought to recover using a remedy provided for under state law. While U.S. Bank may ar-gue that any law that affects its ability to recover a debt necessarily affects its lending operations, that type of rule would swallow all laws-every action by the bank, due to the nature of its business, affects its ability to attract, manage, and disburse capital, and could be said to “affect” its lending operations. The bank cannot now claim its use of the state law rem-edy of repossession to recover a debt is permissible but then claim the same regulation that gives the bank the power to use the remedy also affects the very core of its lending operations. Instead, as stated by the OCC, “the commercial law framework essential for conducting any business, including the business of banking, continues to apply to the operations of na-tional banks.” OCC Interpretive Letter 1082, at n. 12, 2007 WL 5393636 (May 17, 2007).
Ultimately, the Court explained:
Reading the express preemption and savings clauses together, we conclude that the Rees– Levering post-repossession notices are not preempted under the regulation’s vague terms “disclosure” and “other credit-related documents” in light of the savings clause that clearly exempts a state’s “rights to collect debts.” The district court’s broad reading of the terms “disclosure” and “other credit-related documents” would effectively preempt any document related to debt collection, something the OCC was acutely aware of when deliberately choosing the final language of the preemption rule to save such state laws. See 69 Fed.Reg. at 1912.