People v. First American Corp.

Read, J. (dissenting).

The Depression-era Home Owners Loan Act (HOLA) (12 USC § 1462 et seq.), until recently amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) (Pub L 111-203, 124 US Stat 1376 [2010]), occupied the field of the regulation of federal savings associations (FSAs) and was implemented by the Office of Thrift *185Supervision (OTS).1 Further, HOLA’s broad language “expressed] no limits on the [OTS’s] authority to regulate the lending practices of [FSAs],” such that “[i]t would have been difficult for Congress to give the [OTS] a broader mandate” (Fidelity Fed. Sav. & Loan Assn. v De la Cuesta, 458 US 141, 161 [1982] [internal quotation marks omitted] [discussing the power of the Federal Home Loan Bank Board, OTS’s predecessor]). The issue here is whether the real estate appraisal activities that are the subject of this lawsuit fall within the field occupied by OTS in the exercise of its broad regulatory authority over FSAs, thus preempting this action for injunctive and monetary relief (i.e., disgorgement of profits, including appraisal fees paid by borrowers, restitution and damages) for alleged violations of Executive Law § 63 (12) (fraudulent or illegal business practices), General Business Law § 349 (deceptive acts or practices) and unjust enrichment. The federal courts that have considered the comparable question (in particular, the United States District Court for the Southern District of New York) have answered in the affirmative (see Cedeno v IndyMac Bancorp., Inc., 2008 WL 3992304, 2008 US Dist LEXIS 65337 [SD NY 2008]; Spears v Washington Mut., Inc., 2009 WL 605835, 2009 US Dist LEXIS 21646 [ND Cal 2009]). Since I would not second-guess how the federal courts have reasonably interpreted the preemptive effect of a federal statute, I respectfully dissent.

I.

Federal Preemption under HOLA

To carry out its “broad[ ] mandate” under HOLA with respect to the lending practices of FSAs, OTS “promulgated *186regulations governing the powers and operations of every Federal savings and loan association from its cradle to its corporate grave,” and “regulate[d] comprehensively the operations of these associations, including their lending practices and, specifically, the terms of loan instruments” (De la Cuesta, 458 US at 145, 161, 167 [internal quotation marks omitted]).

In 12 CFR 560.2 (a), entitled “Occupation of field,” OTS expressed its preemptive intent in the clearest possible terms:

“OTS is authorized to promulgate regulations that preempt state laws affecting the operations of [FSAs] . . . OTS hereby occupies the entire field of lending regulation for [FSAs]. OTS intends to give [FSAs] maximum flexibility to exercise their lending powers in accordance with a uniform federal scheme of regulation. Accordingly, [FSAs] may extend credit as authorized under federal law, including this part, without regard to state laws purporting to regulate or otherwise affect their credit activities, except to the extent provided in paragraph (c) of this section . . . For purposes of this section, ‘state law’ includes any state statute, regulation, ruling, order or judicial decision” (12 CFR 560.2 [a]).

OTS then sets out 13 “[illustrative examples” of the “types of state laws preempted by [12 CFR 560.2 (a)], without limitation.” As relevant to this discussion, these examples include

“state laws purporting to impose requirements regarding:
“(5) Loan-related fees
“(9) Disclosure and advertising . . . [and]
“(10) Processing, origination, servicing . . . [of] mortgages” (12 CFR 560.2 [b]).

Immediately following the nonexclusive list of types of preempted laws, the regulation identifies types of state laws that “are not preempted to the extent that they only incidentally affect the lending operations of [FSAs] or are otherwise consistent with the purposes of paragraph (a) of this section” (12 CFR 560.2 [c]). These laws include

“(1) Contract and commercial law; (2) Real property law; (3) Homestead laws specified in 12 U.S.C. *1871462a(f); (4) Tort law; (5) Criminal law; and (6) Any other law that OTS, upon review, finds: (i) Furthers a vital state interest; and (ii) Either has only an incidental effect on lending operations or is not otherwise contrary to the purposes expressed in paragraph (a) of this section” (12 CFR 560.2 [c]).

OTS adopted 12 CFR 560.2 in 1996 to express its “longstanding position ... on the federal preemption of state laws affecting the lending activities of federal savings associations,” meant to “confirm and carry forward its existing preemption position” (OTS, Final Rule, 61 Fed Reg 50951, 50965 [1996]). Stated another way, OTS explained that

“[b]ecause lending lies at the heart of the business of a federal thrift, OTS and its predecessor . . . have long taken the position that the federal lending laws and regulations occupy the entire field of lending regulation for [FSAs], leaving no room for state regulation. For these purposes, the field of lending regulation has been defined to encompass all laws affecting lending by federal thrifts, except certain specified areas such as basic real property, contract, commercial, tort, and criminal law” (id. [emphasis added]).

OTS then provided the courts with an interpretive framework for 12 CFR 560.2, as follows:

“When confronted with interpretive questions under § 560.2, we anticipate that courts will, in accordance with well established principles of regulatory construction, look to the regulatory history of § 560.2 for guidance. In this regard, OTS wishes to make clear that the purpose of paragraph (c) is to preserve the traditional infrastructure of basic state laws that undergird commercial transactions, not to open the door to state regulation of lending by [FSAs]. When analyzing the status of state laws under § 560.2, the first step will be to determine whether the type of law in question is listed in paragraph (b). If so, the analysis will end there; the law is preempted. If the law is not covered by paragraph (b), the next question is whether the law affects lending. If it does, then, in accordance with paragraph (a), the presumption arises that the law is preempted. This presumption can be reversed *188only if the law can clearly be shown to fit within the confines of paragraph (c). For these purposes, paragraph (c) is intended to be interpreted narrowly. Any doubt should be resolved in favor of preemption” (id. at 50966-50967 [emphasis added]).

II.

Cedeno

Cedeno was a purported class action brought on behalf of the plaintiff and a similarly situated class of residential home mortgage borrowers against defendant IndyMac, an FSA, and its receiver, the Federal Deposit Insurance Corporation (FDIC). The plaintiff alleged violations of two federal statutes, California’s deceptive practice law and New York’s General Business Law § 349, and claimed breach of contract and unjust enrichment.

IndyMac moved to dismiss all claims, and asserted federal preemption as the basis for dismissing the plaintiffs state law claims. In deciding the motion, the judge accepted as true the plaintiff’s allegations that IndyMac did not “disclose to the plaintiff that it selected appraisers, appraisal companies and/or appraisal management firms who performed faulty and defective appraisal services which inflated the value of residential properties in order to allow [IndyMac] to complete more real estate transactions and obtain greater profits”; neglected “to provide the necessary insulation and separation between its own internal production or sales personnel responsible for providing the mortgage services . . . and the credit or valuation personnel who were responsible for overseeing and verifying the accuracy of the appraisal services,” which led to “pressure” for “approv[al of] inflated appraisals so that loans and profits could be increased”; failed “to ensure that the appraisals were accurate and allowed its own quality control staff to approve inflated and defective appraisals”; “communicated” to appraisers “that there was a certain ‘target value’ or ‘qualifying value’ necessary to close the loan” so that they “understood that if they met the targeted value, they would be selected for future referral of business from IndyMac”; and “hired appraisal management firms or appraisers whose prior performance repeatedly returned the values needed to match the qualifying loan values” (2008 WL 3992304, *1, *2, 2008 US Dist LEXIS 65337, *2, *5-6).

*189With respect to IndyMac’s preemption defense, the court first noted that HOLA vested OTS with the “principal responsibility for regulating federally chartered savings associations”; that in 12 CFR 560.2, OTS had stated “its intention to occupy the entire field of the lending regulation for FSAs” and that “ [pursuant to the plenary authority granted under HOLA to regulate the operations of FSAs,” OTS had issued “extensive regulations governing [their] operations” (2008 WL 3992304, *5, 2008 US Dist LEXIS 65337,*17-18). The judge then turned to 12 CFR 560.2 (b) and (c), observing that included among the “illustrative examples of the types of state laws preempted by OTS regulation” were “state laws purporting to impose requirements regarding loan-related fees (§ 560.2[(b) (5)]), disclosure and advertising (§ 560.2[(b) (9)]), and processing or origination of mortgages (§ 560.2[(b) (10)])”; and that 12 CFR 560.2 (c) “identified] certain types of state laws, such as state contract, tort, and commercial law, that [were] not preempted to the extent that they only incidentally affect[ed]” a thrift’s “lending operations” (2008 WL 3992304, *5, 2008 US Dist LEXIS 65337, *18-19 [internal quotation marks omitted]).

IndyMac argued that “the plaintiffs state law claims [were] specifically directed at loan-related fees as contemplated by Section 560.2(b)(5) and directly challenge[d] both IndyMac’s disclosure and advertising and the processing or origination of mortgages as described in Sections 560.2(b)(9) and 560.2(b)(10),” such that “the Court should not even reach the ‘incidental effect’ analysis contained in section (c)” (2008 WL 3992304, *6, 2008 US Dist LEXIS 65337, *19 [internal quotation marks omitted]). To evaluate IndyMac’s argument, the court turned to OTS’s 1996 regulation because “[w]hen considering, as here, laws that do not on their face purport to impose regulations on the areas listed in paragraph (b), it is necessary to determine whether the law, as applied to the claims raised, is the type of law listed in paragraph (b)” (2008 WL 3992304, *6, 2008 US Dist LEXIS 65337, *20 [emphases added]; see also two cases discussed by the court as examples of the foregoing proposition: Silvas v E*Trade Mtge. Corp., 514 F3d 1001 [9th Cir 2008] [holding claims under the California deceptive practice statute for allegedly faulty disclosure and an allegedly improper lock-in fee preempted under 12 CFR 560.2 (b) (9) and (b) (5), respectively] and In re Ocwen Loan Servicing, LLC Mtge. Servicing Litig., 491 F3d 638 [7th Cir 2007] [concluding that some of the claims asserted under the California deceptive *190practice statute would be preempted and others would not]). Of course, the plaintiff countered that “her state law claims challenging IndyMac’s appraisal practices [were] state contract and commercial challenges that [fell] within the exceptions outlined in paragraph (c),” while IndyMac insisted that she was “merely trying to circumvent HOLA preemption by pleading plainly preempted claims as violations of state contract law and consumer protection statutes” (2008 WL 3992304, *7, 2008 US Dist LEXIS 65337, *22-23).

The judge summed up the issue that he was required to decide as follows:

“The question before the Court is whether the plaintiffs claims under state contract law and California and New York state deceptive practice statutes are brought in an effort to regulate IndyMac’s appraisal practices in a way that interferes with an area defined in paragraph (b) or more than incidentally affects IndyMac’s federally regulated thrift operations for purposes of paragraph (c)” (2008 WL 3992304, *7, 2008 US Dist LEXIS 65337, *23 [emphasis added]).

Evaluating this question first in the context of the California deceptive practice statute, the judge concluded that the plaintiff did, indeed, attempt to apply this statute to “impose requirements in areas explicitly preempted by federal law” because the challenged appraisal practices “appear[ed] to relate directly to the processing or origination of mortgages” and thus fell within 12 CFR 560.2 (b) (10); and “relate[d] directly to the appraisal fee . . . charged in connection with the mortgage,” and thus sought to regulate loan-related fees within the meaning of 12 CFR 560.2 (b) (5) (2008 WL 3992304, *8, 2008 US Dist LEXIS 65337, *25). Further, by challenging the disclosure made to her, the plaintiff also attempted to use the deceptive practices statute “to regulate the disclosures made in connection with the mortgage,” as encompassed by 12 CFR 560.2 (b) (9). The judge therefore opined that “as applied to the plaintiffs allegations,” the California statute was preempted under 12 CFR 560.2 (b) (id.).

Given his disposition of the case, the judge did not need to analyze whether the plaintiffs claim under the California deceptive practice statute “more than incidentally affect[ed]” lending within the meaning of 12 CFR 560.2 (c). He nonetheless added that the statute also ran afoul of this provision because “[t]he *191practices the plaintiff [sought] to regulate relate[d] directly to the valuation of the collateral security for loans”; and “[t]he relief the plaintiff [sought] would plainly set particular requirements on IndyMac’s lending operations” (2008 WL 3992304, *8, 2008 US Dist LEXIS 65337, *26).

Applying the same analysis, the court held that the plaintiffs claim under New York’s General Business Law § 349 was likewise preempted because “[a]s applied to the allegations in this case, [she was] relying on a state law to regulate a loan-related fee, disclosure of information relating to the fee, and the processing and origination of a mortgage,” which were preempted under 12 CFR 560.2 (b) (5), (9) and (10), respectively. Moreover, although it was therefore again unnecessary to analyze the statute’s application under 12 CFR 560.2 (c), the judge concluded that “the New York statute as applied in this case more than incidentally affect [ed] federal thrift lending operations” (2008 WL 3992304, *9, 2008 US Dist LEXIS 65337, *27, *28).

Next, the court addressed the plaintiffs contract claim and her claim for unjust enrichment. As to the former, the judge first observed that plaintiff did not allege that IndyMac had breached any specific provision of any contract that she had entered into with the thrift; rather, “the gist” of her claim, as was the case with her state statutory claims, was that she was provided with an inaccurate appraisal, thereby breaching the covenant of good faith and fair dealing. The court decided that the plaintiff’s state law claim for breach of contract was foreclosed by 12 CFR 560.2 (10) because “like the claims under California and New York deceptive practice statutes, ... it relies on state law purporting to impose a requirement on the processing and origination of the mortgage” (2008 WL 3992304, *10, 2008 US Dist LEXIS 65337, *31). And as he had before, the judge also evaluated the claim under 12 CFR 560.2 (c), concluding that the regulation sought by the plaintiff would more than incidentally affect IndyMac’s lending operations. As he explained,

“[t]he contract claim is simply another means to attempt to regulate the method used by IndyMac to assess the value of collateral in securing its loans. Granting the plaintiff the relief she seeks would have the same effect as a direct regulation of appraisal practices—causing IndyMac to alter the *192methods it uses to evaluate loans and more than incidentally affecting lending operations of federally chartered savings associations” (2008 WL 3992304, *10, 2008 US Dist LEXIS 65337, *32).

Finally, the judge declared that the plaintiffs unjust enrichment claim failed to state a cause of action “because it [was] a quasi contractual claim and the relationship between the plaintiff and IndyMac [was] regulated by contract”; and “[w]hile there [might] be a dispute as to the scope of the contract, there [was] no dispute as to the existence of the contract between the plaintiff and IndyMac” (id.). As a result, any potentially valid claim for unjust enrichment would be preempted for the same reasons stated with respect to the plaintiffs contract claim.2

Spears

The plaintiffs brought this class action against defendants Washington Mutual Bank FA (WaMu), an FSA, First American eAppraiselT (a defendant in this case) and Lender’s Service, Inc. (LSI), claiming that they “participated in a scheme to provide home-loan mortgage borrowers with inflated appraisals of the property they sought to purchase” (2009 WL 605835, *1, 2009 US Dist LEXIS 21646, *2). Specifically, the complaint alleged that WaMu retained First American eAppraiselT and LSI to run its appraisal program; that subsequently, First American eAppraiselT and LSI performed virtually all of WaMu’s appraisals, and, as a result, WaMu’s borrowers became these firms’ largest source of business; that WaMu’s loan origination staff created a list of “preferred appraisers” to perform appraisals for WaMu borrowers; that WaMu maintained the contractual right with these “preferred appraisers” to challenge an appraisal by requesting reconsideration; that WaMu would use such a request to coerce First American eAppraiselT and LSI to increase the appraised value of property; and that WaMu asked First American eAppraiselT and LSI to hire business managers to be given authority to override the values determined by third-party appraisers.

The plaintiffs asserted that this alleged scheme violated a federal law and four provisions of California consumer protection statutes, and constituted a breach of contract and unjust enrichment. After the complaint was filed, the FDIC was *193substituted, as receiver for WaMu, and the plaintiffs stipulated to dismiss all claims against WaMu/the FDIC. First American eAppraiselT and LSI moved to dismiss all claims.

The defendants argued that the plaintiffs’ state statutory claims were preempted by HOLA. The judge followed the analysis employed by the Cedeno court under OTS’s 1996 regulations—i.e., he first looked at whether, as applied, the four state statutory provisions were the type of state law contemplated under 12 CFR 560.2 (b). The plaintiffs based one cause of action on First American eAppraiselT’s alleged unlawful conduct in contravention of the Uniform Standards of Professional Appraisal Practice (USPAP); specifically, the plaintiffs asserted that the appraisal management firm violated USPAP’s requirement that “an appraisal be performed with impartiality, objectivity, and independence” (2009 WL 605835, *5, 2009 US Dist LEXIS 21646, *16). They based two other causes of action on the same conduct, asserting that “the impartiality of the offered appraisals constituted unfair and fraudulent business practices” (id.) Finally, the plaintiffs alleged in a fourth cause of action that First American eAppraiselT “represented that their home appraisal services were of a standard or quality that they were not” in violation of state statute (2009 WL 605835, *5, 2009 US Dist LEXIS 21646, *16-17).

The judge concluded that

“[e]ach of these claims relate directly to the processing and origination of mortgages. Appraisals are required for many real-estate transactions. 12 C.F.R. 34.43 (requiring a certified or licensed appraisal for all real-estate financial transactions except those falling within enumerated exceptions). And those appraisals must be performed according to certain standards in order to protect the public and federal financial interests. 12 C.F.R. 34.41(b). Indeed, plaintiffs’ theory of the case, that lenders and appraisers conspired to inflate appraisals in order to increase mortgage resale prices, demonstrates the importance and interrelationship of impartial appraisals to mortgage origination and servicing” (2009 WL 605835, *6, 2009 US Dist LEXIS 21646, *17 [emphases added]).

Citing Cedeno, the court held that these state statutory claims, “as applied, relate[d] to the processing and origination of, and *194participation in, mortgages, and [were] thus preempted under § 560.2(b)(10)” (id.).3

III.

Analysis

This complaint and the complaints in Cedeno and Spears present the same basic storyline: the FSAs (IndyMac in Cedeno-, WaMu in this case and Spears) shifted from a business model where they held real estate mortgages until the underlying loans were repaid by the borrowers to one where they sold security interests in aggregated mortgages in the financial markets; and in order to maximize their profits from this endeavor, the FSAs coerced or conspired with the appraisal management firms to which they outsourced their real estate appraisal work (unidentified appraisal management firms and appraisers in Cedeno-, First American eAppraiselT in this case and Spears) to inflate the appraised value of the real property backing the home loans that they made. As the majority put it, “the crux of the Attorney General’s complaint is that defendants [thereby] engaged in unlawful and deceptive business practices in that they failed to adhere to the requirements of USPAP,” as required by 12 CFR 564.4 (majority op at 183).

As an initial matter, there can be no doubt that real estate appraisals affect the lending operations of an FSA. This is why Congress amended HOLA in 1989 by adopting the Financial *195Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) (Pub L 101-73, 103 US Stat 183). FIRREA expanded federal oversight of FSAs explicitly to include review and regulation of their real estate appraisal practices (12 USC § 3331 et seq.). In general, Congress sought thereby to improve lending by requiring real estate appraisals used in connection with federally-related transactions to be performed in writing, in accordance with uniform standards (i.e., USPAP) by competent and independent appraisers (see 12 CFR part 564). As the House Report recommending passage of FIRREA pointed out, “[appraisal deficiencies go hand-in-hand with poor underwriting and administration standards” (HR Rep 101-54[I], 101st Cong, 1st Sess, reprinted in 1989 US Code Cong & Admin News, at 96). “Given the crucial role appraisals play in the safety and soundness of the underwriting of real estate related loans and investments,” Congress envisaged that FIRREA would “protect Federal financial and public policy interests in real estate related financial transactions requiring the services of an appraiser” (id. at 274).

This suit is preempted because, in substance, and particularly on the allegations before us, it challenges a thrift’s lending practices. The complaint details alleged collusion between thrift managers and appraisers, the precise activity that Congress found would undermine sound real estate loans. Even if it were theoretically possible for a lawsuit in this vein not to be preempted, it cannot be the case here, where the sole relevance of the alleged misrepresentations is how they affected loans and lending. That is, while the State claims that First American eAppraiselT’s misrepresentations to the public are an independent harm, they are only harmful to the extent they affect lending practices-, put another way, the only reason the appraisers’ alleged misrepresentations matter is because of the way in which they affected the thrift’s underwriting. Since those matters are properly matters of federal law, this suit should not proceed. For the same reasons, the Cedeno and Spears courts both determined that allegedly fraudulent real estate appraisal practices concerned mortgages, and that suits seeking to impose liability for these practices were preempted as attempts to impose substantive requirements in an area regulated by OTS (Cedeno, 2008 WL 3992304, *8, 2008 US Dist LEXIS 65337, *25; Spears, 2009 WL 605835, *6, 2009 US Dist LEXIS 21646 at *17).

The bulk of the complaint in this case alleges, in effect, a failure to disclose, an area that is expressly preempted (12 CFR *196560.2 [b] [9]); the Attorney General seeks to recoup the appraisal fees paid to the thrift by borrowers, and laws that affect loan-related fees are also expressly preempted (id. 560.2 [b] [5]). More broadly, appraisal is so important to mortgage underwriting that it cannot be separated from the processing or origination of mortgages (id. 560.2 [b] [10]), as the courts concluded in Cedeno and Spears. Even if the Attorney General’s claims arguably do not fall within paragraph (b), they affect lending; therefore, they are presumptively preempted and this presumption “can be reversed only if the law can clearly be shown to fit within the confines of paragraph (c)” (61 Fed Reg at 50966). But the Congressional findings in support of FIRREA make clear that a thrift’s appraisal practices do not merely “incidentally affect” lending within the meaning of paragraph (c); they are, in fact, critical to the making of safe and sound real estate loans. As a result, the Attorney General seeks to regulate practices directly related to the valuation of the collateral security for such home loans (see Cedeno, 2008 WL 3992304, *8, 2008 US Dist LEXIS 65337, *26-27).

The majority bases its conclusion that the Attorney General’s claims are not preempted principally on the notion that FIR-REA “governs the regulation of appraisal management companies and explicitly envisioned a cooperative effort between federal and state authorities to ensure that real estate appraisal reports comport with USPAP” (majority op at 184).4 FIRREA establishes a role for the states, but that role is confined to its traditional one of certifying and licensing individual appraisers (see 12 USC §§ 3346-3348).5 Notably, FIRREA did not purport to amend HOLA preemption so as to allow the states to regulate *197a thrift’s real estate appraisal practices. As the Dodd-Frank Act shows, Congress certainly knows how to draft provisions that expressly disclaim any intent to preempt nonconflicting state statutes falling within the same subject area as federal law. And since real estate appraisal activities clearly fall within the subject area pervasively regulated and occupied by HOLA—a thrift’s lending operations—Congress would have to have expressly narrowed HOLA preemption by carving out an exception for real estate appraisal practices: by definition, there can be no such thing as an implied exception from field preemption.

Finally, the Attorney General attempts to get around Cedeno and Spears the only way he can—by characterizing these decisions as “wrongly decided.” He faults both judges for “overlooking] the impact of FIRREA on the field-preemption analysis.” This of course assumes that FIRREA altered HOLA preemption with respect to the real estate appraisal activities that are the subject of this lawsuit, a proposition for which—as already explained—there is simply no support. He also notes that the lawsuit in Cedeno was brought against the FSA, although the defendant in Spears was concededly the appraisal management company—indeed, it was First American eAppraiselT. The fact is, if the Attorney General’s preemption analysis is correct, it should make no difference whether the appraisal practices addressed in this lawsuit were carried out by the thrift’s in-house appraisers (called “staff appraisers” in the regulations; see 12 CFR 564.5 [a]) or outside appraisal firms to which the thrift outsourced its real estate appraisal work (called “fee appraisers” in the regulations; see id. 564.5 [b]). OTS’s regulations governing real estate appraisals apply equally to the staff and fee appraisers. As First American eAppraiselT notes, the Attorney General is merely seeking by this lawsuit to regulate a thrift’s lending activities indirectly by suing the appraisal management company to which the thrift lawfully assigned its authorized banking activities.

In sum, I believe that Cedeno and Spears were correctly decided. In any event, we should, in my view, adopt the federal courts’ interpretation of a federal statute unless that interpretation appears to be plainly wrong. And even if one disagrees with the decisions in Cedeno and Spears, they are certainly reasonable applications of HOLA preemption in the context of real *198estate appraisal practices relating to the underwriting of home loans made by thrifts. Applying the analysis of those cases to the nearly identical facts here, I conclude that this lawsuit is preempted by HOLA.

Chief Judge Lippman and Judges Graffeo, Smith, Pigott and Jones concur with Judge Ciparick; Judge Read dissents and votes to reverse in a separate opinion.

Order affirmed, etc.

. The Dodd-Frank Act brought about a sea change in HOLA preemption: the Act provides that HOLA does not occupy the field in any area of law, and conforms the preemption standard applicable to FSAs to the conflict preemption standard for national banks delineated by the United States Supreme Court in Barnett Bank of Marion Cty., N. A. v Nelson (517 US 25, 31 [1996] [state laws may be preempted where they are in “irreconcilable conflict” with federal statutes, which may occur where compliance with both laws is impossible, or where the state law is “an obstacle to the accomplishment and execution of the full purposes and objectives of Congress” (citations omitted)]; see 12 USC § 1465 [a], [b]). Defendants First American Corporation and First American eAppraiselT readily acknowledge that the Attorney General’s lawsuit would not be preempted under the Dodd-Frank Act’s conflict preemption standard. The new standard for FSAs is not retroactive, however, and only became effective on July 21, 2011, the date when OTS was transferred to the Office of the Comptroller of the Currency (OCC) (see Pub L 111-203, tit X, §§ 1046, 1047 [b]; § 1048, 124 US Stat 1376, 2017). On October 19, 2011, 90 days after this transfer, OTS ceased to exist (see 12 USC § 5413).

. The court also determined that the plaintiff failed to state a claim under either of the federal laws asserted, and so dismissed the complaint.

. In addition to dismissing the four state statutory claims on the basis of HOLA preemption, the court also granted LSI’s motion to dismiss on the basis of lack of standing; denied First American eAppraiselT’s motion to dismiss one of the two claims asserted under federal law, and granted its motion to dismiss the other one; granted its motion to dismiss the breach of contract claim; and granted the plaintiffs 20 days’ leave to amend. Although the judge concluded that the plaintiffs failed to plead an action for breach of contract, he advised them that in the event they chose to amend their breach of contract claim, he would revisit the issue of preemption with respect to it. He also decided that the unjust enrichment claim was subject to dismissal under California law because it had the same basis as the single federal law claim remaining in the action, which furnished an adequate alternative form of relief. Finally, the judge agreed with First American eAppraiselT that, even if the state law claims had not been preempted, the plaintiffs failed to state a claim because there was no showing of actual damages, as required by the statutes; i.e., “[b]ecause plaintiffs would have had to pay for the appraisal in order to take out the loan, they would have paid an appraisal fee whether the appraisal provided was defective or not. That is, had the appraisal been performed lawfully and in good faith, plaintiffs provide[d] no basis on which to conclude that they would have been better off’ (2009 WL 605835, *1, 2009 US Dist LEXIS 21646,*19).

. The majority asserts that two federal district courts’ opinions are “consistent with [its] analysis” (majority op at 184 n 5). Unlike Cedeno and Spears, the facts and legal issues in those cases do not correspond with the facts and legal issues here. For example, in Bolden v KB Home (618 F Supp 2d 1196, 1201 [CD Cal 2008]), the issue was whether FIRREA or the OTS regulation created “complete preemption,” a concept distinct from field preemption— and not an issue in this case—which pertains to whether a federal statute so displaces a state cause of action that, even if pleaded under state law, it actually arises under federal law and creates removal jurisdiction (see e.g. Beneficial Nat. Bank v Anderson, 539 US 1, 6-8 [2003]). Fidelity Natl. Info. Solution, Inc. v Sinclair (2004 WL 764834, *1-3, 2004 US Dist LEXIS 6687, *1-8 [ED Pa 2004]) directly concerned a state’s authority to require those performing appraisals to be licensed, not whether appraisals affected FSAs’ lending operations.

. Even there, OTS cautioned that it might “from time to time, impose additional qualification criteria for certified appraisers performing appraisals in *197connection with federally related transactions within its jurisdiction” (see 12 CFR 564.2 [j]).