ARLINGTON, Va. – NCUA had a crucial legal opinion at press time on this issue. The Federal Credit Union Act pre-empts a California law that regulates federal credit card operations and federally chartered credit unions do not have to abide by it, according to a June 26 letter from NCUA's General Counsel Bob Fenner to NAFCU. "Our opinion is that, because the effect of this state law is to regulate the terms and conditions of credit card lending, it is pre-empted and the State of California may not require federal credit unions to comply with it," Fenner wrote. "Federal credit unions are federal instrumentalities, chartered and regulated under federal law," he added.
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