WASHINGTON - Adding its voice to a contentious California court battle, the Office of Thrift Supervision released a legal opinion Wednesday arguing that a state credit card law should not apply to federally chartered thrifts.
The law requires card issuers to provide California customers with personalized disclosures about the long-term cost of making minimum payments. A consortium of banking companies and trade groups is challenging it as unconstitutional.
In a press statement Wednesday, OTS Director James E. Gilleran said that the law puts thrifts under an increased burden.
The Office of the Comptroller of the Currency has already asserted in two legal opinions that the law should not apply to national banks. The National Credit Union Administration has issued a preemption opinion as well.
Howard Cayne, a senior partner at the law firm of Arnold & Porter who represents the banking industry in the court dispute, said the three regulatory opinions will help bolster the industry's case.
"We think it's a very important development, because we believe the federal judge will be quite interested in the views of the federal agencies charged with regulating federally chartered institutions," Mr. Cayne said.
A hearing in the case had been scheduled for Dec. 6 in U.S. District Court for the Eastern District of California in Sacramento.
