The National Bank Act prevents states from prohibiting expiration dates on gift cards issued from national banks, the U.S. Court of Appeals for the Second Circuit said.
In a ruling this month, the court said that a gift card issued by a national bank on the Visa Inc. network was subject to regulation by the Office of the Comptroller of Currency.
SPGGC, a prepaid card unit of the mall operator Simon Property Group Inc., sued in the U.S. District Court for Connecticut to prevent Connecticut Attorney General Richard Blumenthal from enforcing a state law prohibiting expiration and service fees on gift cards.
Bank of America Corp. issues the Simon Giftcards on the Visa network.
The cards expire after one year, and cardholders pay a $2.95 monthly service fee after six months of inactivity on the cards.
The court agreed with the Simon Property unit's argument that an expiration date was necessary "to implement Visa fraud prevention" on all Visa-branded cards.
