Fox

ORDER

A “due-on-sale” clause in a loan instrument provides the lender an option to declare immediately due and payable all of the sums owed to the lender if all or any part of the real property securing the loan is sold or otherwise transferred by the borrower without the lender’s prior consent. This action involves the question whether state regulation of the validity and exercisability of due-on-sale clauses contained in the loan instruments of federal savings and loan associations executed after June 8, 1976, is preempted by federal law.

I. BACKGROUND

Plaintiff, Glendale Federal Savings and Loan Association (“Glendale Federal”), is a federally chartered savings and loan association organized and operating under the Home Owners’ Loan Act of 1933, as amended, 12 U.S.C. Section 1461 , et seq. (hereinafter “HOLA”). The Federal Home Loan Bank Board (“the Bank Board”) defendant and cross-claimant, is an independent agency of the United States in the Executive Branch, 12 U.S.C. Section 1437 (b), which, under authority delegated by Congress through Section 5(a) of the HOLA, is responsible for the chartering, examining, supervision, and regulation of federal savings and loan…