Recently, the State Court of Appeals of Wisconsin decided an appeal concerning defaulted credit card accounts. The defendant-appellant, an individual who defaulted on two separate credit card accounts, contested the judgments entered in favor of the respondent, a national bank. The appellant argued that the bank did not comply with requirements under the Wisconsin Consumer Act (WCA) to provide a notice of right to cure default before initiating a collection action. The respondent bank, on the other hand, contended that the procedural notice requirements of the WCA were preempted by the National Bank Act (NBA).

The Court of Appeals rejected the bank’s claims and concluded that the NBA does not preempt these state requirements since they do not “significantly interfere” with the bank’s federally authorized powers. The court found the WCA’s notice provisions are related to the process of debt collection rather than the terms of credit or the lending relationship, which were the focus of the NBA’s preemption clause. In its decision, the Court of Appeals reversed the lower court’s judgments in favor of the bank and remanded the case with directions to dismiss the actions.