The Iowa Court of Appeals has ruled that Capital One Bank (USA) didn’t violate an Iowa debt collection law by pursuing debt without registering with the state as a debt collector. 

Debtor Randy Taylor had argued that Capital One’s failure to register under a section of the Iowa Consumer Credit Code constituted an unfair debt collection practice. The appeals court disagreed. 

Previously, in 2012, a trial court denied the bank's motion for summary judgment and held that, as a national bank, it wasn't exempt under the law. In 2013, Capital One renewed its motion and a different trial court agreed with the bank, holding that national banks are exempted from the notification requirement.

The appeals court ruled, "We do not reach the issues of exemption and preemption because we find that a failure to file a notification [pursuant to Section 537.6202 of the Iowa Consumer Credit Code] is not a violation that allows a defendant in a debt collection action to pursue a counterclaim for unfair debt collection practices under the [Iowa Debt Collection Practices Act].”

Taylor's attorney, Raymond H. Johnson of the Johnson Law Firm in West Des Moines, Iowa, said he plans to ask the Iowa Supreme Court to review the latest decision. He told Bloomberg BNA that the lower courts in Iowa are divided on whether national banks must register in order to collect debts in the state. The appeals court declined to address whether the nNational Bank Act preempts Iowa’s law.

Johnson believe it’s unfair to consumers if national banks aren’t required to register in the state. 

"The wrong people are being sued for debts they do not owe. National banks like Capital One and debt buyers are collecting debt with robo-signed affidavits that contain false or seriously misleading statements. Courts need to be fair," he said. 

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