On Monday, September 21, the U.S. District Court for the Western District of New York granted the defendants’ motion to dismiss in the Petersen v. Chase case following a magistrate’s recommendation to dismiss the case in January. The court’s decision includes key findings important for the structured finance market, including: (1) the securitization program is distinguishable from the facts in Madden because the national bank issuer retains ownership of the credit card accounts and has the right to change interest rates (2) this arrangement makes credit card securitization much more akin to what was protected by National Bank Act preemption in a prior decision in Krispin, and (3) the plaintiffs’ New York state usury claims directly affect the issuing national bank’s ability to set interest rates, and so are expressly preempted.  SFA previously filed an amicus brief jointly with the Bank Policy Institute in support of the defendants in August 2019.

 

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