Calif. AG Backs Local DAs in Fight Over Bank Accused of Illegal Collection Practices

The briefs have been filed and the Attorney General of California has submitted an amicus brief to the Court of Appeals for the Ninth Circuit in a case in which four District Attorneys are attempting to sue a financial services company accused of violating the Rosenthal Fair Debt Collection Practices Act and the company is fighting back, saying its bank charter should preclude being sued in state court.

The brief filed by the California AG’s office in support of the District Attorneys in the case of Credit One Bank v. Michael A. Hestrin, the District Attorney of Riverside County, California, can be accessed by clicking here.

The District Attorneys — from Riverside, Santa Clara, San Diego, and Los Angeles — filed their lawsuit in March 2021, alleging that Credit One engaged in harassing debt collection practices under the RFDCPA. Credit One sued the DAs in federal court, arguing that it is pre-empted from state law as a result of its national bank charter. But a District Court judge didn’t see it that way and ruled in favor of the DAs. Credit One subsequently appealed the ruling to the Ninth Circuit.

These District Attorneys have been active in accusing other companies of violating state law in California. Last November, Synchrony Bank reached a settlement and agreed to pay $3.5 million in fines and restitution. And back in 2018, iQor Holdings paid $9 million to settle a lawsuit that was filed by 18 prosecutors in California.

“We’re not going to give banks a get-out-of-jail-free card just because of their charter status,” said Rob Bonta, the Attorney General of California, in a statement. “Credit One engaged in illegal debt collection practices, and they can’t hide behind a misinterpretation of federal law to escape accountability here.”

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