(CN) – Bank of America is not bound by California and Arizona laws allowing a one-day grace period on late fees and interest payments after state holidays, a California appeals court ruled.
Miriam Miller led a class action against Bank of America, claiming the bank improperly charged late fees and interest payments on holidays.
California and Arizona both have laws that allow bank transactions to take place on the day after holidays without any adverse consequences.
The bank argued that those laws are trumped by the National Bank Act, which allows national banks to make non-real estate loans without regard for state laws in devising the terms of credit.
The trial court sustained the bank’s demurrer for leave to amend based on this argument, and the 3rd Appellate District Court of Appeal upheld the decision.
“As the trial court correctly found,” Justice Davis wrote, “by changing when a payment is due in such circumstances, these state statutes affect the schedule for repayment of principal and interest set by a national bank.”