NC Usury Claims Preempted By National Bank Act

In Citibank, S.D., N.A. v. Palma, the COA confirmed that state law usury claims are preempted by the National Bank Act.

In Palma, Citibank sought to collect on unpaid credit debt. Palma counter-claimed alleging usury and pleaded an unconscionability defense. The COA held that NC usury claims are barred by the National Bank Act, which provides the sole remedy for alleged overcharges and under which "there is ... no such thing as a state-law claim of usury against a national bank." And the COA held that because Palma's unconscionability defense boiled down to usury allegations, that defense was also barred.