FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

EDNA SILVAS; RODOLFO SILVAS, 

No. 06-55556 Plaintiffs-Appellants,

D.C. No.

v.  CV-05-02348-TJW

E*TRADE MORTGAGE CORPORATION,

OPINION Defendant-Appellee. 

Appeal from the United States District Court

for the Southern District of California

Thomas J. Whelan, District Judge, Presiding

Argued and Submitted

December 5, 2007—Pasadena, California

Filed January 30, 2008

Before: Harry Pregerson, John T. Noonan, and

Stephen S. Trott, Circuit Judges.

Opinion by Judge Trott

1491
COUNSEL

Norman B. Blumenthal, David R. Markham, Kyle R. Nordrehaug, Blumenthal & Markham, La Jolla, California, for the

plaintiffs-appellants.

Daniel Harris, The Law Offices of Daniel Harris, Chicago,

Illinois, for the plaintiffs-appellants. 

Douglas P. Lobel, David A. Vogel, Cooley Godward Kronish,

LLP, Reston, Virginia, for the defendant-appellee. 

Lori R.E. Ploeger, Cooley Godward Kronish, LLP, Palo Alto,

California, for the defendant-appellee. 

OPINION

TROTT, Circuit Judge: 

Based on the doctrine of preemption, the district court dismissed Plaintiffs-Appellants’ class action suit against

SILVAS v. E*TRADE MORTGAGE CORP. 1493
Defendant-Appellee E*TRADE Mortgage. Appellants argue

that the district court erred in applying field preemption to bar

their claims. We have jurisdiction pursuant 28 U.S.C. § 1291

over this timely appeal, and we affirm. 

I

BACKGROUND 

In October 2001, Plaintiffs-Appellants Edna and Rodolfo

Silvas began the process of refinancing their mortgage with

Defendant-Appellee E*TRADE Mortgage Corporation

(“E*TRADE”). During the process, Appellants paid

E*TRADE a $400.00 fee to lock-in the interest rate. In

November 2001, Appellants elected to rescind the mortgage

within the three days allotted for cancellation under the Truth

in Lending Act (“TILA”). E*TRADE did not refund Appellants’ lock-in fee, and, according to Appellants, it was

E*TRADE’s corporate policy not to refund the fee. 

Nearly four years later, in September 2005, Appellants filed

suit in the Superior Court of Orange County, California. Their

complaint alleged that E*TRADE committed unlawful,

unfair, and deceptive conduct in violation of California’s

Unfair Competition Law (“UCL”), §§ 17200 and 17500 of the

California Business and Professions Code, by misrepresenting

rescission rights under TILA and by failing to provide a

refund of the deposit as required by TILA. Although both

UCL claims were predicated exclusively on a violation of

TILA, Appellants did not assert a claim under TILA itself. 

The first claim alleged that E*TRADE violated UCL

§ 17500, the unfair advertising section, by representing to its

customers that its lock-in fee is non-refundable when, under

law, it is refundable if the consumer decides to exercise his or

her rescission rights under TILA. The complaint further

averred that the false statement was made in E*TRADE’s

1494 SILVAS v. E*TRADE MORTGAGE CORP.
website and its customer disclosures and thus constituted false

advertising. 

The second claim alleged that E*TRADE violated UCL

§ 17200, the general unfair competition section, in two ways.

First Appellants alleged the lock-in policy itself violated UCL

§ 17200 as an unlawful business act. Second, Appellants

alleged that E*TRADE’s practice of misrepresenting consumers’ legal rights in advertisements and other documents is

unfair, deceptive, and contrary to the policy of California. 

Appellants brought this class action on behalf of all California residents who, any time after October 1, 2001, paid a

lock-in deposit to E*TRADE for a mortgage secured by real

property within the state of California and did not get the fee

back after canceling an application or the mortgage loan

transaction. Appellants sought disgorgement of all lock-in

fees E*TRADE collected from class members. 

E*TRADE removed the action to the United States District

Court for the Central District of California under 28 U.S.C.

§ 1441(a). Soon after, E*TRADE moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) on the

ground that federal law preempted the UCL claims. The district court granted the motion to dismiss.

II

DISCUSSION

A. Standard of Review.

We review de novo a district court’s decision to dismiss for

failure to state a claim pursuant to Rule 12(b)(6). Knievel v.

ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). All allegations

of material fact are taken as true and construed in the light

most favorable to the nonmoving party. Id. A complaint must

not be dismissed unless it appears beyond doubt that the

SILVAS v. E*TRADE MORTGAGE CORP. 1495
plaintiff can prove no set of facts in support of the claim that

would entitle the plaintiff to relief. Homedics, Inc. v. Valley

Forge Ins. Co., 315 F.3d 1135, 1138 (9th Cir. 2003). “Questions of statutory interpretation are reviewed de novo, as are

questions of preemption.” Lopez v. Wash. Mut. Bank, 302

F.3d 900, 903 (9th Cir. 2002) (internal citation omitted). 

B. Type of Preemption.

We have identified three ways federal law may preempt

state law: 

First, Congress may preempt state law by so stating

in express terms. Second, preemption may be

inferred when federal regulation in a particular field

is so pervasive as to make reasonable the inference

that Congress left no room for the States to supplement it. In such cases of field preemption, the mere

volume and complexity of federal regulations demonstrate an implicit congressional intent to displace

all state law. Third, preemption may be implied

when state law actually conflicts with federal law.

Such a conflict arises when compliance with both

federal and state regulations is a physical impossibility, or when state law stands as an obstacle to the

accomplishment and execution of the full purposes

and objectives of Congress . . . . 

Bank of Am. v. City and County of S. F., 309 F.3d 551, 558

(9th Cir. 2002) (internal quotation marks and citations omitted). 

Appellants’ arguments against preemption are premised on

their assertion that conflict preemption analysis applies to the

case at bar. We agree, however, with the district court, and

hold that field preemption applies because Appellants’ state

law claims provide state remedies for violations of federal law

in a field preempted entirely by federal law. The general pre1496 SILVAS v. E*TRADE MORTGAGE CORP.
sumption against preemption is not applicable here, and the

relevant regulation is clear—the field of lending regulation of

federal savings associations is preempted. See 12 C.F.R.

§ 560.2. Appellants were too late to sue under TILA. Their

end run will not do. 

1. No Presumption Against Preemption.

[1] While there is a strong presumption against federal preemption of state law governing historic police powers, the

Supreme Court has held that the presumption does not apply

“when [a] State regulates in an area where there has been a

history of significant federal presence.” United States v.

Locke, 529 U.S. 89, 108 (2000). 

“Congress has legislated in the field of banking from the

days of M’Culloch v. Maryland, creating an extensive federal

statutory and regulatory scheme.” Bank of Am., 309 F.3d at

558 (citation omitted). Specific to this case, Congress enacted

the Home Owners’ Loan Act of 1933 (“HOLA”) to charter

savings associations under federal law, at a time when record

numbers of home loans were in default and a staggering number of state-chartered savings associations were insolvent. Id.

at 559. HOLA was designed to restore public confidence by

creating a nationwide system of federal savings and loan associations to be centrally regulated according to nationwide

“best practices.” Fid. Fed. Sav. & Loan Ass’n v. de la Cuesta,

458 U.S. 141, 160-61 (1982). We have described HOLA and

its following agency regulations as a “radical and comprehensive response to the inadequacies of the existing state system,” and “so pervasive as to leave no room for state

regulatory control.” Conference of Fed. Sav. & Loan Ass’ns

v. Stein, 604 F.2d 1256, 1257, 1260 (9th Cir. 1979), aff’d, 445

U.S. 921. “[B]ecause there has been a history of significant

federal presence in national banking, the presumption against

preemption of state law is inapplicable.” Bank of Am., 309

F.3d at 559 (internal quotation marks omitted). 

SILVAS v. E*TRADE MORTGAGE CORP. 1497
2. The OTS Regulation Occupies the Field. 

[2] Through HOLA, Congress gave the Office of Thrift

Supervision (“OTS”) broad authority to issue regulations governing thrifts. 12 U.S.C. § 1464. As the principal regulator for

federal savings associations, OTS promulgated a preemption

regulation in 12 C.F.R. § 560.2. That the preemption is

expressed in OTS’s regulation, instead of HOLA, makes no

difference because, “[f]ederal regulations have no less preemptive effect than federal statutes.” de la Cuesta, 458 U.S.

at 153. The regulation reads inter alia: 

OTS hereby occupies the entire field of lending regulation for federal savings associations. OTS intends

to give federal savings associations maximum flexibility to exercise their lending powers in accordance

with a uniform federal scheme of regulation.

Accordingly, federal savings associations may

extend credit as authorized under federal law, including this part, without regard to state laws purporting

to regulate or otherwise affect their credit activities,

except to the extent provided in paragraph (c) of this

section . . . . 

12 C.F.R. § 560.2(a) (emphasis added). Section 560.2(b) goes

on to provide a list of specific types of state laws that are preempted, two of which, § 560.2(b)(5) and § 560.2(b)(9), are

specifically applicable to this case. 

[T]he types of state laws preempted by paragraph (a)

of this section, include, without limitation, state laws

purporting to impose requirements regarding: 

. . . . 

(5) Loan-related fees, including without limitation,

initial charges, late charges, prepayment penalties,

servicing fees, and overlimit fees; 

1498 SILVAS v. E*TRADE MORTGAGE CORP.
. . . . 

(9) Disclosure and advertising, including laws

requiring specific statements, information, or other

content to be included in credit application forms,

credit solicitations, billing statements, credit contracts, or other credit-related documents and laws

requiring creditors to supply copies of credit reports

to borrowers or applicants; 

12 C.F.R. § 560.2(b)(5) and (9). 

In addition to the mandate in § 560.2(a) and (b), OTS has

outlined a proper analysis in evaluating whether a state law is

preempted under the regulation. 

When analyzing the status of state laws under

§ 560.2, the first step will be to determine whether

the type of law in question is listed in paragraph (b).

If so, the analysis will end there; the law is preempted. If the law is not covered by paragraph (b),

the next question is whether the law affects lending.

If it does, then, in accordance with paragraph (a), the

presumption arises that the law is preempted. This

presumption can be reversed only if the law can

clearly be shown to fit within the confines of paragraph (c). For these purposes, paragraph (c) is

intended to be interpreted narrowly. Any doubt

should be resolved in favor of preemption. 

OTS, Final Rule, 61 Fed. Reg. 50951, 50966-67 (Sept. 30,

1996).1

1

See also OTS Legal Opinion at 7 (Dec. 24, 1996), available at

http://www.ots.treas.gov/docs/5/56615.pdf. (recognizing the preemption

of Indiana law under § 560.2(b)(9) when it merely incorporated by reference already applicable federal requirements); OTS Legal Opinion No. P99-3 at 14-16 (Mar. 10, 1999), available at http://www.ots.treas.gov/

SILVAS v. E*TRADE MORTGAGE CORP. 1499
Appellants’ specific claims are analyzed directly below. 

I UCL § 17500: Unfair Advertising

[3] As outlined by OTS, the first step is to determine if

UCL § 17500, as applied, is a type of state law contemplated

in the list under paragraph (b) of 12 C.F.R. § 560.2. If it is,

the preemption analysis ends. Here, Appellants allege that

E*TRADE violated UCL § 17500 by including false information on its website and in every media advertisement to the

California public. Because this claim is entirely based on

E*TRADE’s disclosures and advertising, it falls within the

specific type of law listed in § 560.2(b)(9).2 Therefore, the

preemption analysis ends. UCL § 17500 as applied in this

case is preempted by federal law. 

II UCL § 17200: Unfair Competition

[4] Again, the first step is to determine if UCL § 17200, as

applied, is a type of state law contemplated in the list under

paragraph (b) of 12 C.F.R. § 560.2. Appellants allege

E*TRADE’s practice of misrepresenting consumers’ legal

rights in advertisements and other documents is contrary to

the policy of California and thus violates UCL § 17200. This

claim, similar to the claim under § 17500, fits within

§ 560.2(b)(9) because the alleged misrepresentation is contained in advertising and disclosure documents. 

docs/5/56903.pdf. (noting the application of § 560.2(b)(9) and (5) in the

context of advertising and loan-related fees under California law). This

construction of 12 C.F.R. § 560.2 by the OTS must be given controlling

weight under Auer v. Robbins, 519 U.S. 452 (1997). See also Bassiri v.

Xerox Corp., 463 F.3d 927, 930 (9th Cir. 2006) (explaining that an agency

interpretation of its own regulation is “controlling” under Auer). 

2Appellants do not contest that E*TRADE is a federal thrift subject to

HOLA and the OTS regulations. 

1500 SILVAS v. E*TRADE MORTGAGE CORP.
[5] In addition, Appellants’ claim under UCL § 17200

alleges that the lock-in fee itself is unlawful. That allegation

triggers a separate section of paragraph (b). Section

560.2(b)(5) specifically preempts state laws purporting to

impose requirements on loan related fees. See Jones v.

E*TRADE Mortgage Co., 397 F.3d 810, 813 (9th Cir. 2005)

(finding E*TRADE’s lock-in fee is not a separate transaction,

but a loan related fee). Because the UCL § 17200 claim, as

applied, is a type of state law listed in paragraph (b)—in two

separate sections—the preemption analysis ends there. Appellants’ claim under UCL § 17200 is preempted. 

C. Incidental Affect Analysis Under 12 C.F.R. § 560.2(c).

Section 560.2(c) provides that state laws of general applicability only incidentally affecting federal savings associations

are not preempted. Appellants argue that both of their state

law claims fit under § 560.2(c)(1) and (4) because they are

founded on California contract, commercial, and tort law,

merely enforcing the private right of action under TILA. They

further contend that their claims use a predicate legal duty

supplied by TILA, and therefore only have an incidental

affect on lending. 

We do not reach the question of whether the law fits within

the confines of paragraph (c) because Appellants’ claims are

based on types of laws listed in paragraph (b) of § 560.2, specifically (b)(9) and (b)(5).3

3

If we did reach the issue, we would reach the same result. When federal law preempts a field, it leaves “no room for the States to supplement

it.” Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947). When an

entire field is preempted, a state may not add a damages remedy unavailable under the federal law. Pub. Util. Dist. No. 1 of Grays Harbor County

Wash. v. IDACORP, Inc., 379 F.3d 641, 648-49 (9th Cir. 2004) (noting

that it would be inconsistent with congressional intent to permit a state

court to do, through a legal principle of general applicability, that which

the federal entity in the preempted field itself may not do). An integral part

of any regulatory scheme is the remedy available against those who vioSILVAS v. E*TRADE MORTGAGE CORP. 1501
D. TILA’s Savings Clause does not Trump HOLA. 

[6] TILA’s savings clause provides that TILA does not preempt state law unless the state law is inconsistent with TILA.

15 U.S.C. § 1610(b). TILA, however, does not trump HOLA

and OTS regulations. 

[7] We have held that a “no preemption clause” or a “savings clause” in a specific act does not preclude the preemptive

effect of HOLA. Bank of Am., 309 F.3d at 565-66. In that

case we analyzed section 1693q of the Electronic Fund Transfer Act (“EFTA”), which has a savings clause similar to that

of TILA. We held that the reference to “this subchapter” in

the savings clause indicated that EFTA’s anti-preemption provision did not apply to HOLA. The same can be said in this

case. The savings clause here begins: “[T]his subchapter does

not otherwise annul, alter, or affect . . . the laws of any State

. . . .” 15 U.S.C. § 1610(b). Following the holding articulated

in Bank of America, TILA’s savings clause is limited to

TILA, and does not apply to HOLA and its OTS regulations.

late the regulations. See, e.g., San Diego Bldg. Trades Council v. Garmon,

359 U.S. 236, 247 (1959) (“The obligation to pay compensation can be,

indeed is designed to be, a potent method of governing conduct and controlling policy. Even the States’ salutary effort to redress private wrongs

or grant compensation for past harm cannot be exerted to regulate activities that are potentially subject to the exclusive federal regulatory

scheme.”). 

In this case, it is clear that the UCL has a much longer statute of limitations than does TILA. Compare CAL. BUS. & PROF. CODE § 17208 (West

2007) (providing a four-year statute of limitations period) with 15 U.S.C.

§ 1640(e) (providing a one-year limitations period for TILA claims). It is

also clear that Appellants seek to take advantage of the longer statute of

limitations under UCL to remedy TILA violations, because without the

extended limitations period their claims would be barred. 

An attempt by Appellants to go outside the congressionally enacted limitation period of TILA is an attempt to enforce a state regulation in an area

expressly preempted by federal law. 

1502 SILVAS v. E*TRADE MORTGAGE CORP.
E. The Entire Class is Dismissed. 

Appellants’ last argument is that there is no justification for

preemption under HOLA, OTS, TILA, or any other statute or

regulation for claims that began to accrue after September 26,

2004 because those claims fit within the one-year statute of

limitations period provided by state law. We do not find this

argument persuasive. 

First, the claim was not presented to the district court, so

it is not appropriately before this court. Doi v. Halekulani

Corp., 276 F.3d 1131, 1140 (9th Cir. 2002). “[I]t is wellestablished that an appellate court will not consider issues that

were not properly raised before the district court. . . . It follows that if a party fails to raise an objection to an issue

before judgment, he or she waives the right to challenge the

issue on appeal.” Id. (quoting Slaven v. Am. Trading Transp.

Co., 146 F.3d 1066, 1069 (9th Cir. 1998)). 

Second, even if this court were to entertain the argument,

Appellants’ complaint does not assert any federal causes of

action. This court has allowed state causes of action based on

TILA as an exercise of supplemental jurisdiction when there

are valid federal claims under TILA. Jones, 397 F.3d at 813

(“The vitality of the [plaintiffs’] claim under the Truth In

Lending Act gives vitality as well to their state claim.”). However, that is not the case here. Appellants’ complaint only sets

forth state-law causes of action, and we held above that those

causes of action are preempted by 12 C.F.R. § 560.2. 

III

CONCLUSION

[8] The district court properly dismissed this class action

against E*TRADE based on federal preemption. HOLA,

through OTS, preempted the entire field of lending regulation.

UCL § 17500 and § 17200, as applied, are specifically listed

SILVAS v. E*TRADE MORTGAGE CORP. 1503
under § 560.2(b) as types of state laws OTS intended to preempt. Our analysis ends there. 

AFFIRMED.

1504 SILVAS v. E*TRADE MORTGAGE CORP.