The Office of the Comptroller of the Currency enacted a final rule last week that will preempt the growing number of state predatory lending laws for nationally chartered banks. Comptroller John Hawke said requiring national banks to follow the patchwork of state statutes would prove costly and burdensome.
At least half a dozen states have passed laws aimed at reigning in predatory lenders over the past two years. Hawke said the practice should be forbidden but is not widespread among the banks it supervises.
State regulators and legislators took immediate offense at the OCC move, which they said was an unfair preemption of states' rights. The action, said Donna Stone, a state representative from Delaware and chair of the National Counsel of State Legislatures Financial Services Committee, "sweeps away virtually all state consumer protections and leaves banking consumers across the country vulnerable to deceptive trade practices."
