## Facts

- Exchange Bank of Gibbon, Nebraska was a federally insured, state-chartered bank led by president Scott Hobson.
- Hobson engaged in internal fraud, including misappropriating bank assets, misstating loan figures, and diverting loan payments for personal benefit.
- The fraud caused losses to the bank and contributed to bank litigation against certain customers (including a dispute involving claimed collateral interests in a customer’s hay crop).
- A group of bank customers and borrowers sued Hobson, the bank, a related holding company, and numerous bank-affiliated individuals.
- Plaintiffs alleged the bank benefited from Hobson’s misconduct and that the combination of contractual interest plus the value of fraud-related gains and recoveries should be treated as “interest” exceeding federal usury limits.
- Plaintiffs asserted usury claims under the National Bank Act (12 U.S.C. §§ 85–86) and under 12 U.S.C. § 1831d(b), and also asserted federal tying claims.
- The district court dismissed the NBA claims for lack of subject-matter jurisdiction and dismissed the § 1831d(b) and tying claims for failure to state a claim; plaintiffs appealed.

## Issues

1. Whether the National Bank Act usury provisions (12 U.S.C. §§ 85–86) apply to a federally insured, state-chartered bank, supplying a federal basis for plaintiffs’ usury claims.
2. Whether plaintiffs stated a plausible claim under 12 U.S.C. § 1831d(b) by treating Hobson’s fraud-related gains and related bank recoveries as “interest” charged to borrowers.
3. Whether plaintiffs adequately pleaded unlawful tying by the bank under applicable federal banking/antitrust tying restrictions.

## Decision

- The Eighth Circuit affirmed the judgment dismissing all claims.
- The National Bank Act usury provisions were inapplicable because Exchange Bank was state-chartered; dismissal of NBA claims for lack of subject-matter jurisdiction was affirmed.
- Plaintiffs failed to state a claim under 12 U.S.C. § 1831d(b) because the alleged fraud-derived benefits and related recoveries were not plausibly “interest” within the statute’s meaning.
- Plaintiffs failed to state a tying claim because the complaint did not adequately allege the required elements of an unlawful tying arrangement.

## Legal Principles

- The National Bank Act’s usury provisions and remedy (12 U.S.C. §§ 85–86) apply to national banks, not to state-chartered banks, even if federally insured.
- A plaintiff cannot convert an employee’s fraud, indirect bank benefits, or litigation outcomes into “interest” for purposes of federal usury statutes absent allegations that borrowers paid amounts for the use or forbearance of money that qualify as interest under the statute.
- Bank tying claims require factual allegations supporting recognized elements of tying (including identification of tying and tied products and coercive conditioning); generalized disputes about loan enforcement or misconduct do not suffice.

## Conclusion

The Eighth Circuit held that usury claims under the National Bank Act cannot be brought against a state-chartered bank and that plaintiffs’ attempt to treat fraud-related gains as usurious “interest” failed under § 1831d(b); it also affirmed dismissal of inadequately pleaded tying claims.


Mamot Feed Lot & Trucking v. Hobson, 539 F.3d 898 (8th Cir. 2008)