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The agency acknowledged the reform law forced certain changes, including mandating that operating subsidiaries of national banks must now follow state consumer protection laws and that the OCC must revise its 2004 preemption rule to remove certain contentious language.
May 13
WASHINGTON — The Office of the Comptroller of the Currency released a proposal Wednesday that would amend, but largely preserve, its federal preemption of national banks.
The new preemption plan, meant to implement provisions of the Dodd-Frank Act, would force operating subsidiaries of national banks to follow state consumer protection laws, and remove language from OCC regulations that state officials had charged was too extreme.
The proposal
Under the plan, the OCC would remove language from its 2004 preemption rule stating national banks can avoid state laws that "obstruct, impair or condition" the business of banking. Many states had warned the language could be used by firms to skirt more than just banking laws.
But while the proposal alters the preemption standard somewhat, the OCC said nothing substantively has changed, and the 1996 Supreme Court decision solidifying the OCC's authority through the so-called Barnett standard still stands. (The proposal has a 30-day comment period.)
"Because the Dodd-Frank Act preserves the Barnett conflict preemption standard, OCC's rules and existing precedents (including judicial decisions and interpretations) consistent with that analysis are also preserved," the proposal said.
Under the proposal, the OCC would also have to consult with the Consumer Financial Protection Bureau on case-by-case preemption determinations, and back up its rationale for preempting a state law with evidence.
