December 05, 2002

In another significant ruling for federally chartered savings associations, a Missouri trial court recently agreed with Jenner & Block in holding that federal law preempts state law claims involving the charging of borrowers fees for the preparation of mortgage documents. In granting motions to dismiss by several mortgage lenders in the state, Judge Melvyn W. Wiesman of the Circuit Court of the County of St. Louis, Missouri, relied on the federal Home Owners Loan Act and the controlling regulations promulgated thereunder by the Office of Thrift Supervision.

This Nov. 13 victory based on a federal preemption defense follows closely on the heels of two other significant victories by the Firm for federal savings associations in Illinois state courts last Spring and Summer, one also defeating claims involving the charging of document preparation fees, and another involving payoff statement fees.

“It can be a great benefit for federal savings associations to raise a preemption argument early in the course of such a lawsuit,” noted Matthew M. Neumeier, a partner at the Chicago office of Jenner & Block and Co-Chair of the Firm’s Class Action Litigation Practice Group. “By doing so, a federal savings association can put an early end to a class action lawsuit and help create uniform precedent regarding the preemption scope of HOLA and the OTS regulations.”

Mr. Neumeier represented one of several federal savings associations in the latest preemption victory along with Jenner & Block Partner Michael Brody and Associate Jennifer L. Vance.