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A key House Financial Services Subcommittee will hold hearings this week into the Comptroller of the Currency's controversial new rules preempting state predatory lending and other consumer protection laws, which are being challenged in court by the New York attorney general. "I am disappointed in the manner in which these rules were finalized," said Rep. Sue Kelly (R-N.Y.), chair of the Financial Services Subcommittee on Oversight and Investigations, in announcing the hearings. The new rules, issued Jan. 7, identified the type of state laws preempted for nationally chartered banks, citing them as impediments to the powers granted to them by federal law. The long-running battle between state and federal regulators is mirrored by one often fought among credit union regulators, with NCUA offering the preemptive shield of the FCU Act in recent years for new state laws in California, North Carolina, Georgia, and the District of Columbia.

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