WASHINGTON MUTUAL BANK, FA v. Superior Court

Petitioner, Washington Mutual Bank, FA (Washington Mutual) is a federally chartered savings and loan association organized and operating under the Home Owners’ Loan Act (HOLA). ( 12 U.S.C. § 1461 et seq.) Washington Mutual seeks a writ of mandate directing the trial court to vacate an order overruling Washington Mutual’s demurrers to those causes of action contained within real parties in interest’s class-action complaints alleging violations of Civil Code section 2948.5 (Section 2948.5), the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.) and California’s Unfair Practices Act (UPA). (Bus. & Prof. Code, § 17200 et seq.) Each of these counts is premised on the theory that Washington Mutual’s practice of charging preclosing interest on home loans is unlawful. We hold that such state law claims are preempted by the HOLA and the act’s implementing regulations. We also hold that Section 2948.5 does not prohibit a lender from charging interest on a home loan prior to close of escrow in those instances where the lender deposits the loan proceeds into escrow by wire or electronic transfer. We will therefore issue a writ directing the superior court to set aside its order…