                         RECOMMENDED FOR FULL-TEXT PUBLICATION
                              Pursuant to Sixth Circuit Rule 206
                                      File Name: 09a0422p.06

                 UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT
                                    _________________


                                                    X
                           Plaintiffs-Appellants, -
 MONROE RETAIL, INC., et al.,
                                                     -
                                                     -
                                                     -
                                                         No. 07-4263
          v.
                                                     ,
                                                      >
                                                     -
                                                     -
 RBS CITIZENS, N.A., f/k/a CHARTER ONE

                         Defendants-Appellees. -
 BANK, N.A., et al.,
                                                     -
                                                    N
                      Appeal from the United States District Court
                      for the Northern District of Ohio at Toledo.
                     No. 06-02391—David A. Katz, District Judge.
                                  Argued: September 19, 2008
                           Decided and Filed: December 14, 2009
                                                                                              *
       Before: COLE and GIBBONS, Circuit Judges; FORESTER, District Judge.

                                      _________________

                                            COUNSEL
ARGUED: William H. Bode, BODE & GRENIER, LLP, Washington, D.C., for
Appellants. Kerin Lyn Kaminski, GIFFEN & KAMINSKI, Cleveland, Ohio, Keith
Alexander Noreika, COVINGTON & BURLING LLP, Washington, D.C., for Appellees.
ON BRIEF: William H. Bode, BODE & GRENIER, LLP, Washington, D.C., for
Appellants. Karen Louise Giffen, GIFFEN & KAMINSKI, Cleveland, Ohio, Keith
Alexander Noreika, COVINGTON & BURLING LLP, Washington, D.C., Frances F.
Goins, Michael Nathan Ungar, Jason S. Hollander, ULMER & BERNE, Cleveland,
Ohio, Brett K. Bacon, Gregory R. Farkas, FRANTZ WARD LLP, Cleveland, Ohio, for
Appellees.
       GIBBONS, J., delivered the opinion of the court, in which FORESTER, D.J.,
joined. COLE, J. (pp. 16-21), delivered a separate dissenting opinion.




        *
        The Honorable Karl S. Forester, Senior United States District Judge for the Eastern District of
Kentucky, sitting by designation.


                                                  1
No. 07-4263            Monroe Retail, et al. v. RBS Citizens, et al.                              Page 2


                                        _________________

                                              OPINION
                                        _________________

         JULIA SMITH GIBBONS, Circuit Judge. Plaintiffs-appellants Monroe Retail,
Inc.; Jerome Phillips, Esq.; and Leo Marks, Inc. (“the Garnishors”) appeal the district
court’s dismissal of their claim against defendants-appellees RBS Citizens, N.A.
(formerly known as Charter One Bank, N.A.); The Huntington National Bank;
Huntington Bancshares, Inc.; JPMorgan Chase Bank, N.A.; JPMorgan Chase & Co.;
Keybank, N.A.; Keycorp, National City Bank; National City Corporation; Sky Bank;
U.S. Bank, N.A.; and U.S. Bancorp (“the Banks”). The Garnishors brought suit against
the Banks for conversion, alleging that the Banks unlawfully used garnished funds to
satisfy service fees to the Banks. For the reasons below, we affirm the dismissal of the
Garnishors’ claim.

                                                    I.

         The relevant facts are not in dispute. The Garnishors are garnishor-creditors in
Ohio who obtain judgments against debtors when debts are not repaid. The Garnishors
often collect these judgments by garnishing the debtors’ bank accounts. Ohio Revised
Code (“ORC”) § 2716.12 provides that a garnishment action must be accompanied by
a one dollar fee to the garnishee, in this case, the Banks who hold the debtors’ funds in
customer accounts. The Banks charge an additional $25 to $80 service fee to the debtors
for the garnishment process. When debtors have insufficient funds to satisfy both the
service fee and the garnishment order, the Banks extract the service fees from the
garnished funds before releasing the remainder of the funds to the Garnishors.

         The Garnishors filed a class action suit against the Banks1 in the Court of
Common Pleas of Lucas County, Ohio, on August 31, 2006, alleging three causes of


         1
           The Garnishors originally filed suit against Fifth Third Bank as well. However, Fifth Third Bank
filed a motion for summary judgment, arguing that it had been erroneously included as a defendant since
it did not subtract service fees from garnished funds. The Garnishors voluntarily dismissed Fifth Third
Bank as a defendant.
No. 07-4263        Monroe Retail, et al. v. RBS Citizens, et al.                  Page 3


action against the Banks. First, the Garnishors claimed that the service fees charged by
the Banks amount to additional garnishment fees beyond the one dollar fee authorized
by ORC § 2716.12 and therefore violate that section, causing the Garnishors to have lost
at least $5,000,000. Second, the Garnishors claimed that by deducting these service fees,
the Banks were illegally converting funds belonging to the Garnishors for their own use
in violation of the garnishment process prescribed by ORC § 2716.13(B) and
§ 2716.21(D). Third, the Garnishors sought injunctive relief to prevent the Banks from
continuing to deduct service fees from funds in the debtors’ accounts. The Banks all
responded by filing dispositive motions.

       Defendants The Huntington National Bank; Huntington Bancshares Inc.;
JPMorgan Chase Bank, N.A.; JPMorgan Chase & Co.; National City Bank; National
City Corporation; U.S. Bank N.A.; and U.S. Bancorp (“Removing Defendants”) timely
filed a notice of removal on October 3, 2006. The case was removed to the United States
District Court for the Northern District of Ohio. The Removing Defendants filed a
motion for judgment on the pleadings on January 19, 2007. Defendants Charter One
Bank and Sky Bank also filed motions for judgment on the pleadings. Defendants
KeyBank and KeyCorp filed a motion to dismiss. In their various motions, the Banks
claimed, inter alia, that 1) the Garnishors lacked standing; 2) the Banks were not proper
defendants; 3) ORC § 2716.12 unambiguously permits additional fees beyond one
dollar; and 4) the Garnishors’ claims are preempted by federal banking law. KeyBank,
KeyCorp, and Sky Bank, the sole state bank defendant, additionally claimed that 5) the
Banks have a right to “set off” an account-holder’s debt to the Banks, including service
fees, against the account-holder’s debt to the Garnishor.

       On September 18, 2007, the district court held that 1) the Garnishors had
standing because they suffered actual injuries; and 2) the Garnishors met their pleading
burden to show that the Banks should be defendants. The district court dismissed the
Garnishors’ complaint on the remaining grounds, concluding that 3) ORC § 2716.12’s
plain meaning “contains no clear limitation on additional garnishment charges”; 4) the
National Banking Act preempts the Garnishors’ claims as to national banks but not as
No. 07-4263         Monroe Retail, et al. v. RBS Citizens, et al.                     Page 4


to state banks; and 5) the Banks have a right to set off service fees against bank accounts
before remitting the remaining funds to the Garnishors. Monroe Retail, Inc. v. Charter
One Bank, N.A., __ F. Supp. 2d __, No. 3:06 CV 2391, 2007 WL 2769645 (N.D. Ohio
Sept. 18, 2007). The district court noted that its finding that the National Banking Act
preempted state regulation of bank fees was consistent with the Officer of the
Comptroller of the Currency’s interpretation of its own regulations.

        The Garnishors timely appealed. In their final reply brief, the Garnishors
withdrew their claim that the Banks had violated ORC § 2716.12. Thus the only
substantive issue on appeal before us is the Garnishors’ conversion claim.

                                             II.

        We review a district court’s determination of standing de novo. See Wuliger v.
Mfrs. Life Ins. Co., 567 F.3d 787, 793 (6th Cir. 2009). “Every federal appellate court has
a special obligation to ‘satisfy itself not only of its own jurisdiction, but also that of the
lower courts in a cause under review,’ even though the parties are prepared to concede
it.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 95 (1998) (quoting Mitchell v.
Maurer, 293 U.S. 237, 244 (1934)). The issue of standing was thoroughly discussed by
the district court, and neither party raised the issue on appeal. Nevertheless, “a merits
question cannot be given priority over an Article III question,” id. at 97 n.2, and we must
begin by addressing standing. In order to bring suit, the Garnishors must have standing
as required both by Article III of the United States Constitution and by the doctrine of
prudential standing. See Warth v. Seldin, 422 U.S. 490, 498-99 (1975).

        In order to establish Article III standing, the Garnishors “must have suffered
some actual or threatened injury due to the alleged illegal conduct of the defendant; the
injury must be ‘fairly traceable’ to the challenged action; and there must be a substantial
likelihood that the relief requested will redress or prevent the plaintiff’s injury.” Coyne
ex rel. Ohio v. Am. Tobacco Co., 183 F.3d 488, 494 (6th Cir. 1999). Phrased succinctly,
the “‘irreducible minimum’ . . . requirements for standing are proof of injury in fact,
causation, and redressability.” Id. The Garnishors claim that by receiving garnishment
funds that have been reduced by the Banks’ service fees, the Garnishors have suffered
No. 07-4263        Monroe Retail, et al. v. RBS Citizens, et al.                    Page 5


actual injuries. This loss is an injury in fact that could be redressed by compensating the
Garnishors for their economic losses. See id. We thus affirm the district court’s finding
that the Garnishors have established standing under Article III.

       “Once [the Garnishors] allege[] an injury-in-fact that is fairly traceable to the
actions of [the Banks, the Garnishors] must show that [they] ha[ve] met the prudential
standing requirements.” Club Italia Soccer & Sports Org., Inc. v. Charter Twp. of
Shelby, 470 F.3d 286, 295 (6th Cir. 2006). In order to satisfy prudential standing, the
Garnishors’ claims must 1) “assert [their] own legal rights and interests,” 2) be more
than a “generalized grievance,” and, 3) in statutory cases, “fall within the zone of
interests regulated by the statute in question.”     Wuliger, 567 F.3d at 793 (internal
citation and quotation marks omitted). The Garnishors have asserted their own legal
rights and interests in receiving the full amount of the garnished funds pursuant to
lawfully obtained judgments. The fact that the service fees are initially charged to
debtors does not negate the fact that their collection by the Banks affects the rights and
interests of the Garnishors. Furthermore, the Garnishors pled a particular grievance
involving the specific garnishment process undertaken by the Banks with regards to
debtors’ insufficient garnishment funds. Lastly, the Garnishors have withdrawn their
statutory claim, so this requirement is no longer applicable. The Garnishors have
demonstrated that they are “proper proponent[s], and the action a proper vehicle, to
vindicate the rights asserted.” Id. (internal citation and quotation marks omitted). We
thus find that the Garnishors have established prudential standing, and we proceed to
merits of their claims.

                                           III.

       We review de novo a district court’s grant of judgment on the pleadings. See
Hughlett v. Romer-Sensky, 497 F.3d 557, 561 (6th Cir. 2006). We grant a party’s motion
for judgment on the pleadings when “all well-pleaded material allegations of the
pleadings of the opposing party [are] taken as true, and . . . the moving party is
nevertheless clearly entitled to judgment.” JPMorgan Chase Bank, N.A. v. Winget, 510
F.3d 577, 581 (6th Cir. 2007) (internal citation and quotation marks omitted). There
No. 07-4263             Monroe Retail, et al. v. RBS Citizens, et al.                                Page 6


must be no material issue of fact that could prevent judgment for the moving party. Id.
at 582. “The standard of review for a judgment on the pleadings is the same as that for
a motion to dismiss under Federal Rule of Procedure 12(b)(6).” EEOC v. J.H. Routh
Packing Co., 246 F.3d 850, 851 (6th Cir. 2001). We thus review the Banks’ various
motions for judgment on the pleadings and motions to dismiss under the same de novo
standard.

         Because the Garnishors have withdrawn their claim that the Banks violated ORC
§ 2716.12, the only issue before us is whether the Garnishors’ conversion claim can
survive a motion for judgment on the pleadings and a motion to dismiss.2 The
Garnishors claim that the Banks have wrongfully converted $25 to $80 per garnishment
to their own use in violation of ORC § 2716.13(B)3 and ORC § 2716.21(D).4 These
regulations state that garnishees, including banks, become liable to the Garnishors “at
the time the garnishee is served with the [garnishment] order.” ORC § 2716.21(D). The
Garnishors interpret these regulations to require the Banks to relinquish debtors’ funds
before deducting service fees for the garnishment process. The Banks argue that the




         2
            The district court did not address the Garnishors’ request for an injunction, presumably because
after it dismissed the Garnishors’ claims, the injunction was a moot issue. The Garnishors have not raised
their request for an injunction on appeal and have therefore waived the issue. JGR, Inc. v. Thomasville
Furniture Indus., Inc., 550 F.3d 529, 532 (6th Cir. 2008). Even if they had not waived the issue, their
request for an injunction remains moot because we affirm the dismissal of the Garnishors’ claims.
         3
          The pertinent language in ORC § 2716.13(B) states: “The [garnishment] order shall bind the
property in excess of four hundred dollars, other than personal earnings, of the judgment debtor in the
possession of the garnishee at the time of service.”
         4
             The text of ORC § 2716.21(D) provides:
         A garnishee shall pay the personal earnings owed to the judgment debtor or the money
         or value of the property or credits, other than personal earnings, of the judgment debtor
         in the garnishee’s possession or under the garnishee’s control at the time of service of
         the order of garnishment, or so much thereof as the court orders, into court. The
         garnishee shall be discharged from liability to the judgment debtor for money so paid
         and shall not be subjected to costs beyond those caused by the garnishee’s resistance of
         the claims against the garnishee. A garnishee is liable to the judgment creditor for all
         money, property, and credits, other than personal earnings, of the judgment debtor in the
         garnishee’s possession or under the garnishee’s control or for all personal earnings due
         from the garnishee to the judgment debtor, whichever is applicable, at the time the
         garnishee is served with the order under section 2716.05 or 2716.13 of the Revised
         Code.
No. 07-4263           Monroe Retail, et al. v. RBS Citizens, et al.                             Page 7


Garnishors do not state a claim because the National Bank Act, 12 U.S.C. § 24 (Seventh)
(“NBA”), permits them to charge fees and preempts any claim to the contrary.5

         Ordinarily, a presumption against preemption applies. See United States v.
Locke, 529 U.S. 89, 108 (2000); Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230
(1947). In the context of national banking, however, the Supreme Court has held that
the general presumption against preemption does not apply. See Watters v. Wachovia
Bank, N.A., 550 U.S. 1, 12 (2007); Locke, 529 U.S. at 108 (“[A]n ‘assumption’ of
nonpre-emption is not triggered when the State regulates in an area where there has been
a history of significant federal presence.”); Barnett Bank of Marion County, N.A. v.
Nelson, 517 U.S. 25, 32 (1996).

         The Banks were created pursuant to federal legislation, namely, the NBA. The
NBA authorizes national banks to “exercise . . . all such incidental powers as shall be
necessary to carry on the business of banking.” 12 U.S.C. § 24 (Seventh). The Officer
of the Comptroller of the Currency (“OCC”), which has regulatory and supervisory
power over national banks, has issued regulations defining the “incidental powers” a
national bank may exercise without state interference. See, e.g., NationsBank of N.C.,
N.A. v. Variable Annuity Life Ins. Co., 513 U.S. 251, 256-58 (1995). The OCC’s
interpretation of the NBA is entitled to substantial deference:

         It is settled that courts should give great weight to any reasonable
         construction of a regulatory statute adopted by the agency charged with
         the enforcement of that statute. The [OCC] is charged with the
         enforcement of banking laws to an extent that warrants the invocation of
         this principle with respect to [its] deliberative conclusions as to the
         meaning of these laws.

Clarke v. Secs. Indus. Ass’n, 479 U.S 388, 403-04 (1987) (citation omitted) (quoting
Investment Co. Institute v. Camp, 401 U.S. 617, 626-27 (1971), and collecting cases).



         5
          The Garnishors brought claims against both national and state banks before the district court.
The Huntington National Bank; JPMorgan Chase Bank, N.A.; Keybank N.A.; Keycorp; National City
Bank; U.S. Bank N.A.; and Charter One are national banks, and Sky Bank was a state bank. As noted at
oral argument, however, Huntington Bancshares has since acquired Sky Bank. Therefore, all of the
defendants are now national banks, and we need not bifurcate the analysis.
No. 07-4263        Monroe Retail, et al. v. RBS Citizens, et al.                   Page 8


       The OCC has specifically defined the ability to charge fees as an “incidental
power” of a national bank. The OCC promulgated § 7.4002(a) of Title 12 of the Code
of Federal Regulations, which gives national banks explicit “[a]uthority to impose
charges and fees.” 12 C.F.R. § 7.4002(a). Both parties have stipulated that the Banks
have authority pursuant to such federal regulation to charge contractual fees to their
customers. They disagree, however, as to whether the NBA’s grant of authority to
charge fees includes the service fees for the garnishment process and preempts the
Garnishors’ conversion claim.

       The Banks contend that the NBA permits them to charge the Garnishors the
service fees when debtors have insufficient funds in their accounts to satisfy the fees.
According to the OCC’s regulations, a national bank is authorized to “charge its
customers non-interest charges and fees, including deposit account service charges.” Id.
The Banks argue that this language permits them to collect service fees from debtors’
accounts, even if the funds in the accounts are subject to garnishment by the Garnishors.
In response, the Garnishors argue that their right to the funds is protected by Ohio’s
garnishment statute, see ORC §§ 2716.13(B), 2716.21(D), and that Ohio garnishment
law is explicitly exempt from preemption and the Banks’ broad authority under 12
C.F.R. § 7.4007(c)(4), which exempts state laws governing the “rights to collect debts”
from preemption. The Banks contend that this language exempts only state laws
governing the Banks’ rights to collect debts from preemption, not the Garnishors’ rights,
and further argue that any interpretation of Ohio debt collection law that would allow the
Garnishors’ claim to proceed is preempted by the NBA.

       We find that the NBA does not preempt general state laws governing the rights
of all entities, not just Banks, to collect debts; but we conclude that the Garnishors’
specific conversion claim pursuant to the Ohio garnishment statute is nevertheless
preempted by the NBA’s grant of authority to the Banks to charge and collect fees.
No. 07-4263        Monroe Retail, et al. v. RBS Citizens, et al.                      Page 9


A. “Rights to Collect Debts”

       The OCC has promulgated regulations that save certain areas of state law from
general preemption by the NBA. The first question before us is whether the NBA saves
all state laws governing “rights to collect debts” from preemption, or, as the Banks
contend, merely laws governing the Banks’ rights to collect debts. The text of the
pertinent regulation states:

       State laws that are not preempted. State laws on the following subjects
       are not inconsistent with the deposit-taking powers of national banks and
       apply to national banks to the extent that they only incidentally affect the
       exercise of national banks’ deposit-taking powers:
       (1) Contracts;
       (2) Torts;
       (3) Criminal law;
       (4) Rights to collect debts;
       (5) Acquisition and transfer of property;
       (6) Taxation;
       (7) Zoning;
       (8) Any other law the effect of which the OCC determines to be
       incidental to the deposit-taking operations of national banks or otherwise
       consistent with the powers set out in paragraph (a) of this section.

12 C.F.R. § 7.4007(c) (footnote omitted).

       The Banks claim that this language clearly refers only to the Banks’ rights to
collect debts and thus that all other laws governing the rights to collect debts, including
ORC § 2716.13(B) and § 2716.21(D), are preempted by the NBA. In support of their
opinion, the Banks solicited an opinion letter from the OCC in interpreting whether
“rights to collect debts” involved service fees charged for the garnishment process.
Assuming that the “rights to collect debts” referred to the Banks’ rights, the OCC
declared that this exemption was not implicated by the garnishment process because the
service fees did not constitute “debts.” “This provision [exempting “rights to collect
debts”] is not relevant to the current circumstances. . . . Thus, 12 C.F.R. § 7.4007(c)(4)
pertains to a bank’s right to recover a debt, not to the means the bank uses to pursue that
right.” OCC Interp. Letter (Jan. 18, 2007) (Removing Defs. Br. Attach. C) (“OCC
No. 07-4263         Monroe Retail, et al. v. RBS Citizens, et al.                   Page 10


Interp. Letter (Jan 18, 2007)”) (emphasis omitted). The OCC did not address whether
the NBA preempts all laws regarding rights to collect debts.

        The OCC opinion letter was not issued through notice and comment rule-making.
Generally, opinion letters are analyzed under Skidmore deference. See Skidmore v. Swift
& Co., 323 U.S. 134, 140 (1944). “[W]hile not controlling upon the courts by reason of
[its] authority,” we give an interpretation weight “depend[ing] upon the thoroughness
evident in its consideration, the validity of its reasoning, its consistency with earlier and
later pronouncements, and all those factors which give it power to persuade, if lacking
power to control.” Id. The Banks urge us to apply a higher level of deference to the
OCC’s letter, relying on the Supreme Court’s comment in United States v. Mead, that
“as significant as notice-and-comment is in pointing to Chevron authority, the want of
that procedure here does not decide the case, for we have sometimes found reasons for
Chevron deference even when no such administrative formality was required and none
was afforded.” 533 U.S. 218, 230-31 (2001) (citing NationsBank of N.C., 513 U.S. at
256-57, 263).

        In this case, however, the Banks have provided us no reason to afford the OCC’s
interpretation regarding “rights to collect debts” a higher level of deference. First, it is
not clear that the OCC’s letter represents its opinion on the matter because it never
addressed whether the NBA preempts general state law governing other parties’ rights
to collect debts. Second, to the extent the letter is an opinion that all state law governing
debts is preempted except for laws governing the Banks’ “rights to collect debts,” the
Banks, as well as the OCC, have cited no case law to support this proposition. In fact,
both the Banks and the OCC argue simply that the service fee owed to the Banks is not
a debt. This argument misses the point – the Garnishors claim that it is their right to
collect their debts that falls into the exemption.

        Regardless of whether the specific language of 12 C.F.R. § 7.4007(c) refers
solely to the Banks’ rights under state law, nowhere does the NBA purport to preempt
state laws governing all other entities’ rights. Indeed, the policy behind reserving these
areas of law to the states is precisely that they are laws of general applicability that do
No. 07-4263         Monroe Retail, et al. v. RBS Citizens, et al.                  Page 11


not target banks. Bank Activities and Operations, 69 Fed. Reg. 1904, 1912 & n.60 (Jan.
13, 2004). The Banks have taken the presumption of preemption to an illogical extreme.
Their suggestion that the exemption only pertains to banks’ rights under state law to debt
collection would create an inconsistent and erroneous result: The Banks’ rights to
collect debts would be governed by state law and would not be preempted, but the Banks
themselves would not be required to comply with state laws in enforcing the rights of
others to collect debts. The Banks’ narrow reading would render the language either
inconsistent, as mentioned above, or superfluous. It defies common sense to think that
without this explicit reservation, the NBA would preempt the right of creditors, or even
banks alone, to collect debts. Indeed, under the Banks’ interpretation, no one but
national banks would be subject to tort law because the law as applied to every other
entity would be preempted by the NBA.               We thus reject the Banks’ narrow
interpretation, and the OCC’s letter to the extent it espouses this interpretation, and find
that the NBA does not preempt general state debt collection laws, including those
regulating both banks’ and others’ rights to collect debts.

B. Banks’ Authority to Charge Fees

        This finding, however, does not end our inquiry. We must now examine whether
the Garnishors’ specific conversion claim pursuant to Ohio’s garnishment statute is
preempted. As mentioned above, state laws, including those governing “rights to collect
debts,” are only exempted from preemption “to the extent that they only incidentally
affect the exercise of national banks’ deposit-taking powers.” 12 C.F.R. § 7.4002(c)(4).
The Supreme Court has held that states may not “prevent or significantly interfere with
the national bank’s exercise of its powers.” Barnett Bank, 517 U.S. at 33. When state
laws “significantly impair the exercise of authority, enumerated or incidental under the
NBA,” the state laws “must give way.” Watters, 550 U.S. at 12. We have found that the
level of “interference” that gives rise to preemption under the NBA is not very high. See
Ass’n of Banks in Ins., Inc. v. Duryee, 270 F.3d 397, 409 (6th Cir. 2001) (rejecting as
No. 07-4263            Monroe Retail, et al. v. RBS Citizens, et al.                               Page 12


“unpersuasive” an “attempt to redefine ‘significantly interfere’ as ‘effectively thwart’”).6
Although the Garnishors have withdrawn their statutory claim, the Banks argue that any
interpretation of Ohio’s garnishment laws that would allow the Garnishors’ conversion
claim to proceed would interfere with their ability to collect fees, as authorized by 12
C.F.R. § 7.4002(a), and is thus preempted.

         The Banks also solicited the OCC’s opinion on this matter. In its same opinion
letter, the OCC declared that the service fee for the garnishment process was a “fee”
within the meaning of 12 C.F.R. § 7.4002 and therefore that the Banks were authorized
to collect these fees. OCC Interp. Letter (Jan. 18, 2007). Attendant to this authority to
charge fees is the authority and discretion to determine the amount and method of
charging those fees. See 12 C.F.R. § 7.4002(b)(2) (“The establishment of non-interest
charges and fees, their amounts, and the method of calculating them are business
decisions to be made by each bank, in its discretion, according to sound banking
judgment and safe and sound banking principles.”). By preventing the banks from
exacting a fee for processing the garnishment orders through freezing the accounts, the
Ohio garnishment laws “significantly interfere” with this fundamental national bank
function by de facto mandating a $1 fee and the method by which that fee is extracted.

         Moreover, the OCC stated that a “bank’s authorization to establish fees pursuant
to § 7.4002(a) includes the authorization to determine the order in which the fees are
posted to a depositor’s account.” Id. As explained by the OCC, “[t]he garnishment fee
and the Bank’s process of debiting it first are intended to reduce the Bank’s costs and
compensate the Bank for other potential risks in connection with the legal requirement
to process garnishments served on the Bank.” Id. Accordingly, if the Banks are
authorized to charge the service fee and similarly authorized to post the service fee in



         6
           The dissent’s reliance on Anderson National Bank v. Luckett, 321 U.S. 233 (1944), and
McClellan v. Chipman, 164 U.S. 347 (1896), is misplaced because the statutes at issue in those cases
imposed no burden whatsoever on national banks. See Luckett, 321 U.S. at 248 (“Under the statute, the
state merely acquires the right to demand payment of the accounts in the place of the depositors. Upon
payment of the deposits to the state, the bank’s obligation is discharged.”); McClellan, 164 U.S. at 359–60
(finding that the state law prevented banks from engaging in contracts that were unlawful under state
contract law and did not at all prevent banks from generally taking real estate as collateral as permitted by
national banking laws).
No. 07-4263        Monroe Retail, et al. v. RBS Citizens, et al.                 Page 13


whatever order they determine, the OCC argued that the Banks are consequently
authorized to collect the service fee even if this process has the effect of reducing the
funds that the Garnishors receive: “We further confirm that the Bank is authorized by
section 24(Seventh) and section 7.4002 to debit the garnishment fee from an account
prior to remitting funds to the garnishor.” Id.

       We find this argument persuasive. The requirement that banks freeze accounts
immediately upon receipt of a garnishment order is unduly burdensome on national
banks because it mandates the order in which those banks carry out their daily account-
balancing and account-management functions. The OCC has consistently interpreted
§ 7.4002(a) as including the authorization to determine the order in which banks may
post fees to an account. See, e.g., OCC Interp. Letter No. 1082, 2007 WL 3341502, at
*2 (May 17, 2007); OCC Interp. Letter No. 933, 2002 WL 31955273, at *4 (August 17,
2001). Likewise, we note that this proposition is consistent with Ohio law, which grants
state banks the power to decide that “items may be accepted, paid, certified, or charged
to the indicated account of its customer in any order.” Ohio Rev. Code, § 1304.29(B).

       We find the OCC’s interpretation sensible as it permits the Banks to complete the
daily account-balancing tasks that all banks must undertake, both as a general
operational matter and specifically in the context of responding to a garnishment notice
served on debtors’ accounts. The Garnishors cite the Ohio garnishment statute, which
states that garnishees are liable “at the time of service of the order” of garnishment.
ORC § 2716.21(D). Relying on this statutory language, the Garnishors claim that Ohio
law requires the Banks to freeze the funds in the debtors’ accounts at the time of service
of the garnishment order and thus that Ohio law prohibits them from further deducting
service fees after receiving the garnishment order. We agree with the Banks that the
Garnishors’ contention that the Banks must immediately “freeze” the garnished accounts
is overly simplistic as the Banks must first undertake a number of procedures to assess
what funds are available to be garnished.

       Thus the Garnishors’ interpretation would allow ORC § 2716.13(B) and
§ 2716.21(D) to “significantly interfere” not only with the Banks’ ability to collect and
No. 07-4263           Monroe Retail, et al. v. RBS Citizens, et al.                            Page 14


set their service fees, but also with the Banks’ federal authority to complete other
transactions and balance their accounts. See Duryee, 270 F.3d at 409. We therefore find
that any interpretation of the Ohio garnishment statute that would allow the Garnishors’
claim to proceed is preempted by the NBA’s grant of authority to the Banks to collect
fees without interference. The Garnishors have thus failed to state a claim upon which
relief can be granted. See Fed. R. Civ. P. 12(b)(6), (c).

C. Setoffs

         The district court found that even if the Garnishors’ claims were not preempted,
the Garnishors’ claims should be dismissed because the Banks have a right to “set off”
the service fee against the garnished funds before releasing the remainder of the funds
to the Garnishors. Although the issue of setoffs is not necessary to our holding, we
vacate the district court’s invocation of the doctrine of setoff because the doctrine is
applicable only to debts.

         In their appellate briefs, the Banks and Garnishors all agree that the service fees
are not “setoffs.” (Charter One’s Br. 18) (“Charter One’s Assessment of Fees Is Not a
“Setoff”); (Removing Def.’s Br. 26) (“Plaintiffs’ arguments are based on the flawed
premise that the doctrine of ‘setoff’ applies.”); (KeyBank, N.A., and KeyCorp’s Br. 20)
(“There is a fundamental difference in the bank’s charging internal processing fees to
its customers pursuant to its account agreement, and the rules of traditional debitor /
creditor setoff”); (Pl.’s Br. 19) (“The Banks Concede Their Seizure of Garnished Funds
Is Not a Setoff”).7 The district court, without explaining its reasoning, found to the
contrary: “The parties address this issue passingly, so this Court finds it sufficient to
note that, in light of the long history of the practice and the fact that the legislature failed
to explicitly exclude it, § 2716.12 is not intended to interfere with the common law right
of setoff.” Monroe Retail, Inc., 2007 WL 2769645, at *6. The district court nevertheless


         7
           KeyBank, N.A., KeyCorp, and Sky Bank were the only defendants to argue before the district
court that the rules of setoff apply. KeyBank, N.A., and KeyCorp have since changed their position to
align with that of the other defendants and the OCC, (KeyBank, N.A., and KeyCorp’s Br. 20) (“There is
a fundamental difference in the bank’s charging internal processing fees to its customers pursuant to its
account agreement, and the rules of traditional debitor / creditor setoff”), and Sky Bank is no longer a
party. Therefore there is no longer any party arguing that the doctrine of setoff should apply.
No. 07-4263         Monroe Retail, et al. v. RBS Citizens, et al.                  Page 15


found this issue dispositive: “This Court grants [the Banks’] motions to dismiss on the
basis of the language of section 2716.12 and the preservation of [Banks’] right to set-
off.” Id. at *7.

        As defined by the Ohio Supreme Court, the common law right of setoff is “an
extrajudicial self-help remedy based on general principles of equity” that “allows a bank
to apply general deposits of a depositor against a depositor’s matured debt.” Daugherty
v. Cent. Trust Co. of Ne. Ohio, N.A., 504 N.E.2d 1100, 1104 (Ohio 1986). In other
words, setoff “is that right which exists between two parties, each of whom under an
independent contract owes a definite amount to the other, to set off their respective debts
by way of mutual deduction.” Walter v. Nat’l City Bank of Cleveland, 330 N.E.2d 425,
525 (Ohio 1975). The doctrine of setoff only applies when banks use customers’ funds
to satisfy an “independent contract” and external debt to the bank. Pruitt v. LGR
Trucking, Inc., 774 N.E.2d 273, 277-78 (Ohio App. 2002). By contrast, the dispute in
this case centers on whether the Banks can satisfy a customer’s service fee by reducing
the same, internal account by that amount before releasing the remaining funds to the
Garnishors. We thus vacate the district court’s characterization of service fees as setoffs.
See id. (finding that the principle of setoff did not apply because the debts were not
based on independent contracts).

                                            IV.

        For the foregoing reasons, we affirm the dismissal of the Garnishors’ claim on
the ground that the NBA preempts their conversion allegations.
No. 07-4263        Monroe Retail, et al. v. RBS Citizens, et al.                  Page 16


                                ___________________

                                     DISSENT
                                ___________________

       COLE, Circuit Judge, dissenting. The majority concludes that the National Bank
Act, (“NBA”), and the regulation promulgated under it that allows national banks to
collect fees for account services, 12 C.F.R. § 7.4002(a), preempt Ohio’s garnishment
law, ORC § 2716.13(B) and § 2716.21(D). I disagree. The garnishment law at issue is
a law of general applicability that only incidentally affects national banks, with
negligible effect on their ability to perform their business. Both Supreme Court
precedent and the plain language of the OCC regulation’s savings clause strongly
suggest that preemption is inappropriate here.

A.     Supreme Court precedent clearly weighs against preemption

       The majority opinion rests on several cases that it claims support a finding of
preemption, but it does not discuss the substance of those cases, nor does it address the
two Supreme Court decisions on which Monroe Retail principally relies. The cases cited
by the majority do not weigh in favor of preemption here because those cases involved
much more significant intrusions into the business of national banks—intrusions that
bear little resemblance to the Ohio statute before us. On the other hand, the cases cited
by Monroe Retail dealt with state statutes similar to Ohio’s garnishment law, and both
held those statutes not to be preempted by national banking laws.

       The majority relies on Watters v. Wachovia Bank, N.A., 550 U.S. 1, 21 (2007),
in which the Court held that state regulators could not exercise corporate visitorial
powers, such as the right to inspect books and records, over national banks’ operating
subsidiaries. The state conceded that the NBA preempts state visitorial powers over the
national banks themselves, but claimed that the same was not true of bank subsidiaries
(specifically at issue were subsidiaries in the mortgage-lending business). Id. at 15. The
Court disagreed and held that the NBA preempted the state from exercising its visitorial
powers over the subsidiaries: “[S]tate regulators cannot interfere with the ‘business of
banking’ by subjecting national banks or their OCC-licensed operating subsidiaries to
No. 07-4263        Monroe Retail, et al. v. RBS Citizens, et al.                 Page 17


multiple audits and surveillance under rival oversight regimes.” Id. at 21. Thus, the
intrusion into the business of banking at issue in Watters—“multiple audits [by state
regulators] and surveillance under rival oversight regimes”—was far more significant
than Ohio’s garnishment law.

       The majority also relies on Barnett Bank of Marion County, N.A. v. Nelson, but
there, the state law at issue prohibited most national banks from selling insurance in
small towns in the state. 517 U.S. 25, 29 (1996) (“[T]he State Statute says, in essence,
that banks cannot sell insurance in Florida – except that an unaffiliated small town bank
(i.e., a bank that is not affiliated with a bank holding company) may sell insurance in a
small town.”). However, a federal statute gave national banks that very power. Id. at
28 (describing the Act of Sept. 7, 1916, 39 Stat. 753, as amended, 12 U.S.C. § 92, which
provides that certain national banks may sell insurance in small towns). Accordingly,
the Court found that the state statute “‘st[ood] as an obstacle to the accomplishment’ of
one of the Federal Statute’s purposes,” and was therefore preempted. Id. at 31 (quoting
Hines v. Davidowitz, 312 U.S. 52, 67 (1941)). The Court clarified:

       In defining the pre-emptive scope of statutes and regulations granting a
       power to national banks, [our past] cases take the view that normally
       Congress would not want States to forbid, or to impair significantly, the
       exercise of a power that Congress explicitly granted. To say this is not
       to deprive States of the power to regulate national banks, where (unlike
       here) doing so does not prevent or significantly interfere with the
       national bank’s exercise of its powers.

Id. at 33 (emphasis added). As with Watters, the state statute in Barnett, which barred
national banks from engaging in a whole sector of business, was of a completely
different nature from the garnishment statute before us. See also Franklin Nat’l Bank
v. New York, 347 U.S. 373, 377-78 (1954) (holding that federal statutes authorizing
national banks to receive savings deposits preempted New York law barring non-state-
chartered banks from using the word “savings” in advertising, since the law interfered
with the banks’ “right to let the public know about” a business in which federal law
permitted them to engage).
No. 07-4263         Monroe Retail, et al. v. RBS Citizens, et al.                   Page 18


        The majority also relies on a prior case from this Circuit, Association of Banks
in Insurance, Inc. v. Duryee, in which the state law at issue was an Ohio statute allowing
the superintendent of insurance to deny or revoke an insurance license upon determining
that the insurer’s “principal purpose” has been to sell insurance to certain categories of
customers. 270 F.3d 397, 406-08 (6th Cir. 2001). The statute was enacted as a
consumer protection measure to “prevent an unfair advantage in the placing of insurance
and the licensing of persons who were not intending to do a general insurance business,
but simply to supplement their primary business.” Id. at 408 (internal quotations
omitted). The Duryee court noted that this state law would implicate many national bank
customers and that to comply with the law, a national bank would “have to limit its
business with many if not most of its customers until it could generate sufficient business
outside this restricted customer base to stay below the” maximum allowable percentage
of certain types of customers. Id. at 409. The court found the Ohio statute to be
preempted because it “significantly interfere[d]” with national banks’ ability to exercise
their power to sell insurance. Id. at 410. It was in this context that the court rejected the
state’s argument that a state statute must “effectively thwart” national banks’ powers to
be preempted. (See Maj. Slip Op. 12.) Again, however, this statute, which dictated the
parties to whom national banks could sell insurance and threatened revocation of
national banks’ insurance licenses depending on the composition of their customers, rose
to a much higher level of interference with national banks’ business functions than
Ohio’s garnishment law does.

        Thus, the cases cited by the majority offer limited guidance because they entail
far more significant intrusions into the business of national banks than the statute before
us. The majority does not mention two cases raised by Monroe Retail in which the
Supreme Court declined to find preemption with respect to state statutes similar to the
one at issue here. Those decisions held that such statutes are not preempted because they
do not significantly impair national banks’ functions.

        In Anderson National Bank v. Luckett, 321 U.S. 233, 236 (1944), the Supreme
Court found that a state law directing banks, both state and national, to “turn over to the
No. 07-4263        Monroe Retail, et al. v. RBS Citizens, et al.                  Page 19


state, deposits which have remained inactive and unclaimed for a specified period” was
not preempted by national banking laws. The Court stated: “This Court has often
pointed out that national banks are subject to state laws, unless those laws infringe the
national banking laws or impose an undue burden on the performance of the banks’
functions.” Id. at 248. With respect to the requirement that banks, including national
banks, turn over abandoned funds, the Court stated: “It has never been suggested that
non-discriminatory laws of this type are so burdensome as to be inapplicable to the
accounts of depositors in national banks.” Id. (emphasis added). We are not at liberty
to ignore the holding of this binding authority. I doubt the majority would contend that
if the state law at issue in Luckett had also specified that banks were required to turn
over all of the abandoned property, without first deducting an “abandoned-property-
turnover fee,” like the one at issue in the present case, the Luckett Court would have
changed course and deemed the state law to be preempted. Luckett was cited by the
Supreme Court several months ago, and there is no indication that it is no longer good
law. See Cuomo v. Clearing House Ass’n, L.L.C., 129 S. Ct. 2710, 2721-22 (2009). In
light of Luckett, I fail to see how we can fairly hold that Ohio’s garnishment law is
preempted.

       The Supreme Court engaged in similar analysis and reached the same result in
McClellan v. Chipman, 164 U.S. 347, 358 (1896). In that case, a national bank argued
that a federal statute that allowed national banks to accept real property in satisfaction
of a debt preempted a state statute that forbade preferential transfers of property to
creditors on the eve of insolvency. The Court rejected this argument, stating:

       [There is nothing] in the statutes of the State of Massachusetts, here
       considered, which in any way impairs the efficiency of national banks or
       frustrates the purpose for which they were created. No function of such
       banks is destroyed or hampered by allowing the banks to exercise the
       power to take real estate, provided only they do so under the same
       conditions and restrictions to which all the other citizens of the State are
       subjected, one of which limitations arises from the provisions of the state
       law which in case of insolvency seeks to forbid preferences between
       creditors.
No. 07-4263         Monroe Retail, et al. v. RBS Citizens, et al.                    Page 20


Id. This case, too, presents a much more analogous state law to the one under our
consideration than any of the cases upon which the majority relies, further demonstrating
that preemption should not apply here.

        The above cases stand for the following proposition: a non-discriminating state
law of general applicability that has an incidental effect on national banks but does not
“frustrate[] the purpose for which they were created,” McClellan, 164 U.S. at 358,
“impose an undue burden on the performance of [their] functions,” Luckett, 321 U.S. at
248, or “prevent or significantly interfere with the [] exercise of [their] powers,” Barnett,
517 U.S. at 33, is not preempted by federal banking laws.

        In its conclusion that Ohio’s garnishment law does, in fact, rise to the level of
such a significant burden for national banks, the majority begs the central question when
it states that the garnishment law “‘significantly interfere[s]’ . . . with the Banks’ ability
to collect their service fees.” No one disputes that. In fact, it does not just significantly
interfere with their ability to collect garnishment fees—it forbids it. But the same was
true of the law in McClelland, which forbade national banks from receiving preferences
in violation of state law, and the law in Luckett, which forbade national banks from
retaining abandoned funds claimed by the state. The real question—the one for which
the majority has no persuasive answer—is how a restriction on national banks’ ability
to charge account service fees when turning over garnished funds to the rightful owner
imposes an undue burden or significantly interferes with the banks’ ability to function
in their business as national banks. Clearly it does not. The only examples of hardship
to which the majority points are the Banks’ ability “to complete other transactions” and
to “balance their accounts.” These hardships are illusory: if the banks do not deduct a
service fee on garnished funds, their concern about the order in which they deduct it
disappears. And the Banks’ inability to immediately “freeze” the garnished accounts
because they “must first undertake a number of procedures to assess what funds are
available to be garnished” is no cause for worry—no one is challenging their right to
assess what funds are available, which bears no relation to their right to deduct some of
the garnished funds for themselves.
No. 07-4263         Monroe Retail, et al. v. RBS Citizens, et al.                    Page 21


B.      The plain language of the savings clause weighs against preemption

        The Ohio garnishment statute fits within an explicit exception to preemption. See
12 C.F.R. § 7.4007(c). This savings clause lists a number of other areas of bodies of
state law that, in addition to “rights to collect debts,” are not preempted: contracts, torts,
criminal law, acquisition and transfer of property, taxation, and zoning. All of these are
laws of general applicability that incidentally affect, but do not target, national banks.
The garnishment law at issue affects not only national banks, but state banks, employers,
trustees—any entity that might be subject to a garnishment action. As the majority
recognizes, and for the reasons stated in the majority’s opinion, the banks’ (and the OCC
opinion letter’s) argument that the savings clause refers only to banks’ rights to collect
debts is highly implausible.

C.      Conclusion

        For the foregoing reasons, I believe the NBA does not preempt Ohio’s
garnishment law—a law of general applicability that, judging by the Supreme Court’s
jurisprudence, does not represent the kind of serious infringement on national banks’
ability to function that would justify preemption. Therefore, I respectfully dissent.
