March 29, 2002

In a case of first impression, the Illinois Appellate Court today ruled that Jenner & Block's client, a federally-chartered savings association, could not be sued under state consumer fraud laws for charging mortgage loan pay-off statement fees because such claims are "preempted" under 12 C.F.R. Sec. 560.2, the enabling regulation promulgated by the Office of Thrift Supervision under the Home Owners' Loan Act of 1933. 

Also preempted, the court ruled, were the plaintiffs' breach of contract claim because it would have more than incidentally affected the lending operations of the Firm's client, Washington Mutual Bank, FA (WAMU), and would have interfered with the federal regulation's purpose of allowing such federal savings associations maximum flexibility in exercising their lending powers.

Partner Matthew M. Neumeier represented WAMU at the trial level and on the appeal.  Others on the litigation team inluced Associates Danielle J. Szukala and Michael B. DeSanctis.  The team is defending WAMU in several other related cases, which are expected to be dismissed following this new ruling.