Blanco v. Key Bank

Opposition to bank’s federal preemption defense in case involving a bogus trade school and fraudulent student loans.

Plaintiffs obtained loans from Key Bank, a national bank, to attend a trade school that closed down before their classes were completed. They filed a lawsuit seeking, inter alia, repayment of their loan monies from Key Bank and a discharge of future payment obligations pursuant to an Ohio statute – the Ohio Retail Installment Sales Act – that makes lenders (such as Key Bank) subject to all the defenses and claims that a buyer would be able to assert against a seller. Key Bank moved to dismiss on the ground that the students’ claims are preempted by federal banking regulations that, according to Key Bank, preempt all state laws in this area. Public Justice joined the case to assist in briefing and arguing the preemption issue in the district court and on appeal. The plaintiffs’ legal team included Public Justice’s Leslie Brueckner, lead counsel; and J. Daniel Clark and Christopher C. Casper of Tampa, Florida.