[Congressional Record Volume 141, Number 6 (Wednesday, January 11, 1995)]
[Extensions of Remarks]
[Page E88]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                 MAZAIKA VERSUS BANK ONE COLUMBUS, N.A.

                                 ______


                           HON. ROBERT W. NEY

                                of ohio

                    in the house of representatives

                      Wednesday, January 11, 1995
  Mr. NEY. Mr. Speaker, for the information of my colleagues I am 
entering into the Record the following letter to Mr. Leach, chairman of 
the House Banking and Financial Services Committee regarding the 
Mazaika v. Bank One Columbus, N.A., No. 00231 (PA Superior Court 1994) 
decision:

                                     House of Representatives,

                                                 January 10, 1995.
     Congressman Jim Leach,
     Chairman, House Banking and Financial Services Committee, 
         Rayburn House Office Building, Washington, DC.
       Dear Jim: Last month, the Pennsylvania Superior Court 
     issued a decision interpreting important provisions of the 
     Riegle-Neal Interstate Banking and Branching Act of 1994--
     provisions that our colleagues worked on together during the 
     103rd Congress.
       The case that we are referring to, as you know, is the 
     Mazaika v. Bank One Columbus, N.A. No. 00231 (PA Superior 
     Court 1994) decision. In a 6 to 3 decision, the Pennsylvania 
     Superior Court determined that a national bank located in 
     Ohio was not authorized by Section 85 of the National Bank 
     Act to collect certain credit-card charges from Pennsylvania 
     residents. This holding conflicts with the conclusions 
     reached by many other courts across the country and the clear 
     legislative intent. These other courts have held, based on 
     decisions of the United States Supreme Court and other 
     authorities (including opinions by the federal bank 
     regulators), that a national bank may collect credit card 
     charges from borrowers, no matter where they live, as long as 
     the charges are legal in the national bank's home state.
       We believe that the Mazaika court made two fundamental 
     errors in its interpretation of the Riegle-Neal Interstate 
     Banking and Branching Act of 1994. The court found that the 
     ``applicable law'' provision in the interstate law applied, 
     even though that provision is applicable only when a bank 
     actually has branches in a second state. This provision has 
     no bearing on or relevance to the facts in the Mazaika case 
     because, in that case, no branching by the Ohio bank into 
     Pennsylvania is involved.
       The Mazaika court also ignored the provision in the 
     interstate law that actually is relevant, the ``savings 
     clause'' in Section 111 of the Interstate law. The savings 
     clause ensured that a bank's ability to collect all lending 
     charges was not affected by other provisions of the 
     interstate law (such as the applicable law provision). The 
     savings clause preserves the pre-existing lending authority 
     of banks to collect all lending charges in accordance with 
     home state law, without regard to the changes in branching 
     authority made by the interstate law.
       It is always frustrating when courts fail to interpret 
     correctly the plain meaning of the laws we enact. This is 
     particularly troubling in this case. We therefore would 
     appreciate your assistance in clarifying the legislative 
     intent regarding this matter.
           Very truly yours,
     Deborah Pryce.
     Robert Ney.
     

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