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Harold Rose et al v. Bank of America

November 21, 2011


APPEAL from a judgment of the Superior Court of Los Angeles County. Jane L. Johnson, Judge. (Los Angeles County Super. Ct. No. BC433460)

The opinion of the court was delivered by: Boren, P.J.



Plaintiffs allege that a bank violated the federal Truth in Savings Act (TISA) by failing to properly disclose fee increases on personal bank accounts. (12 U.S.C. § 4301 et seq.)*fn1 TISA formerly allowed a private right of action against banks that failed to comply with the law's disclosure provisions. (§ 4310(a).) The statutory provision allowing a private right of action was repealed in 2001.

When Congress repealed the statutory right of consumers to enforce TISA, it intended to bar all private actions alleging TISA violations, including indirect enforcement suits brought under California's unfair competition law (UCL). (Bus. & Prof. Code, § 17200.) The UCL may not be deployed to redress TISA violations. Plaintiffs' UCL action--based on technical violations of TISA--was properly dismissed.


Plaintiffs in this putative class action lawsuit have deposit accounts at defendant Bank of America (the Bank). They allege that the Bank failed to properly notify them about price increases on fees applicable to their deposit accounts, in violation of TISA. The Bank informed plaintiffs on their written account statements that there were "upcoming pricing changes" as detailed in an "enclosed brochure." Plaintiffs claim that the notice was not clear and conspicuous, nor did it specify the exact increase for their personal accounts or the precise date the increase would take effect. After announcing the increase, the Bank deducted higher monthly fees from plaintiffs' accounts.

Based on the alleged TISA violations, plaintiffs assert a single cause of action for violation of the UCL, claiming that the Bank's practices are unlawful and unfair. They seek restitution of all money improperly deducted for increased service fees taken by the Bank from their personal accounts, interest, injunctive relief, attorney fees and costs.

The Bank demurred to the complaint. It argued that Congress has expressly prohibited a private right of action to enforce TISA, presenting an insurmountable obstacle to plaintiffs' UCL claim based on TISA. Plaintiffs countered that they retain their state causes of action--including a UCL claim premised on TISA violations--because TISA does not preempt state law, nor does it expressly bar enforcement via the UCL.

The trial court sustained the demurrer with leave to amend. It found that the repeal of TISA's civil enforcement provision showed that Congress intended to bar private actions, and the UCL cannot be used to "plead around" an absolute bar to relief. The court granted leave to amend, so that plaintiffs could articulate another basis for relief, apart from TISA. Plaintiffs gave notice that they did not intend to file an amended pleading. The court signed an order of dismissal and entered judgment in favor of the Bank. This timely appeal from the judgment ensued.


Appeal lies from the dismissal order after the trial court sustained demurrers and plaintiffs were unable to amend the pleading. (Code Civ. Proc., §§ 581d, 904.1, subd. (a)(1); Serra Canyon Co. v. California Coastal Com. (2004) 120 Cal.App.4th 663, 667; Tanen v. Southwest Airlines Co. (2010) 187 Cal.App.4th 1156, 1162.) We review de novo the ruling on the demurrer, exercising our independent judgment to determine whether a cause of action has been stated as a matter of law. (Desai v. Farmers Ins. Exchange (1996) 47 Cal.App.4th 1110, 1115.)

The Truth in Savings Act

TISA was enacted in 1991 "to require the clear and uniform disclosure of . . . the rates of interest which are payable on deposit accounts by depository institutions; and . . . the fees that are assessable against deposit accounts, so that consumers can make a meaningful comparison between the competing claims of depository institutions with regard to deposit accounts." (§ 4301(b).) The goal is to enhance economic stability, improve competition among banks, and enable consumers to make informed decisions regarding deposit accounts by requiring uniform disclosure of the terms, conditions, and fees associated with bank accounts. (§ 4301(a).) To implement TISA, the Federal Reserve Board issued Regulation DD. (§ 4308; 12 C.F.R. § 230.1, 57 Fed.Reg. 43376, amended ...

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