Padao v. American Express National Bank (E.D.N.C.)
On March 2, 2023, the United States filed a Statement of Interest in Padao v. American Express National Bank (E.D.N.C.), a class action lawsuit brought under the Servicemembers Civil Relief Act (“SCRA”) by a servicemember on behalf of a class of servicemembers who held credit cards issued by, or had other interest-bearing obligations to, the bank. The complaint alleges that the defendant failed to comply with Section 3937 of the SCRA, which requires lenders to limit the interest rate charged to eligible servicemembers to 6% during periods of military service. In its Statement of Interest, the United States argues that the SCRA gives servicemembers pursuing SCRA claims the right to participate in a class action case in federal court even where a defendant seeks to enforce a contract clause mandating individual arbitration.