ALEXANDRIA, Va. – NCUA said its rules and regulations preempt the provisions of a California law requiring a notice of intent to dispose of a repossessed vehicle that is being challenged in state court.
In a new legal opinion, NCUA said its lending regulation expressly preempts state laws affecting the terms of repayment for all loans made by federal credit unions, including the California law which prevents creditors from collecting a deficiency judgement if they do not comply with the notice.
The law requires a creditor to provide a detailed, comprehensive notice to the borrower of intent to dispose of a repossessed vehicle.
A recent ruling by a California appeals court found that the notice requirement is preempted for federally chartered thrifts by regulations of the federal Office of Thrift Supervision.
