Opinion ID: 1360640
Heading Depth: 3
Heading Rank: 1

Heading: Rights to Collect Debts

Text: The OCC has promulgated regulations that save certain areas of state law from general preemption by the NBA. The first question before us is whether the NBA saves all state laws governing rights to collect debts from preemption, or, as the Banks contend, merely laws governing the Banks' rights to collect debts. The text of the pertinent regulation states: State laws that are not preempted. State laws on the following subjects are not inconsistent with the deposit-taking powers of national banks and apply to national banks to the extent that they only incidentally affect the exercise of national banks' deposit-taking powers: (1) Contracts; (2) Torts; (3) Criminal law; (4) Rights to collect debts; (5) Acquisition and transfer of property; (6) Taxation; (7) Zoning; (8) Any other law the effect of which the OCC determines to be incidental to the deposit-taking operations of national banks or otherwise consistent with the powers set out in paragraph (a) of this section. 12 C.F.R. § 7.4007(c) (footnote omitted). The Banks claim that this language clearly refers only to the Banks' rights to collect debts and thus that all other laws governing the rights to collect debts, including ORC § 2716.13(B) and § 2716.21(D), are preempted by the NBA. In support of their opinion, the Banks solicited an opinion letter from the OCC in interpreting whether rights to collect debts involved service fees charged for the garnishment process. Assuming that the rights to collect debts referred to the Banks' rights, the OCC declared that this exemption was not implicated by the garnishment process because the service fees did not constitute debts. This provision [exempting `rights to collect debts'] is not relevant to the current circumstances. . . . Thus, 12 C.F.R. § 7.4007(c)(4) pertains to a bank's right to recover a debt, not to the means the bank uses to pursue that right. OCC Interp. Letter (Jan. 18, 2007) (Removing Defs. Br. Attach. C) (OCC Interp. Letter (Jan. 18, 2007)) (emphasis omitted). The OCC did not address whether the NBA preempts all laws regarding rights to collect debts. The OCC opinion letter was not issued through notice and comment rule-making. Generally, opinion letters are analyzed under Skidmore deference. See Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944). [W]hile not controlling upon the courts by reason of [its] authority, we give an interpretation weight depend[ing] upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control. Id. The Banks urge us to apply a higher level of deference to the OCC's letter, relying on the Supreme Court's comment in United States v. Mead, that as significant as notice-and-comment is in pointing to Chevron authority, the want of that procedure here does not decide the case, for we have sometimes found reasons for Chevron deference even when no such administrative formality was required and none was afforded. 533 U.S. 218, 230-31, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) (citing NationsBank of N.C., 513 U.S. at 256-57, 263, 115 S.Ct. 810). In this case, however, the Banks have provided us no reason to afford the OCC's interpretation regarding rights to collect debts a higher level of deference. First, it is not clear that the OCC's letter represents its opinion on the matter because it never addressed whether the NBA preempts general state law governing other parties' rights to collect debts. Second, to the extent the letter is an opinion that all state law governing debts is preempted except for laws governing the Banks' rights to collect debts, the Banks, as well as the OCC, have cited no case law to support this proposition. In fact, both the Banks and the OCC argue simply that the service fee owed to the Banks is not a debt. This argument misses the point the Garnishors claim that it is their right to collect their debts that falls into the exemption. Regardless of whether the specific language of 12 C.F.R. § 7.4007(c) refers solely to the Banks' rights under state law, nowhere does the NBA purport to preempt state laws governing all other entities' rights. Indeed, the policy behind reserving these areas of law to the states is precisely that they are laws of general applicability that do not target banks. Bank Activities and Operations, 69 Fed. Reg. 1904, 1912 & n. 60 (Jan. 13, 2004). The Banks have taken the presumption of preemption to an illogical extreme. Their suggestion that the exemption only pertains to banks' rights under state law to debt collection would create an inconsistent and erroneous result: The Banks' rights to collect debts would be governed by state law and would not be preempted, but the Banks themselves would not be required to comply with state laws in enforcing the rights of others to collect debts. The Banks' narrow reading would render the language either inconsistent, as mentioned above, or superfluous. It defies common sense to think that without this explicit reservation, the NBA would preempt the right of creditors, or even banks alone, to collect debts. Indeed, under the Banks' interpretation, no one but national banks would be subject to tort law because the law as applied to every other entity would be preempted by the NBA. We thus reject the Banks' narrow interpretation, and the OCC's letter to the extent it espouses this interpretation, and find that the NBA does not preempt general state debt collection laws, including those regulating both banks' and others' rights to collect debts.