-
WASHINGTON — Despite his past as a state regulator, Thomas Curry signaled intent Wednesday to listen to both sides in the preemption debate if confirmed as comptroller of the currency.
July 20 -
WASHINGTON — In the wake of a public disagreement over a pending proposal, a House panel is asking the Treasury Department to disclose the role it played in the Office of the Comptroller of the Currency's rulemaking on preemption.
July 1 -
The Treasury Department has unexpectedly allied with state regulators and consumer groups in their bid to force the Office of the Comptroller of the Currency to dial back its preemption standards.
June 28 -
The Office of the Comptroller of the Currency released a proposal Wednesday that would amend, but largely preserve, its federal preemption of national banks.
May 25
WASHINGTON — The Office of the Comptroller of the Currency admitted Wednesday the Dodd-Frank Act may be a better guide than the agency's own rulemakings on its preemption authority.
The agency had sparked criticism in May when it proposed that Dodd-Frank validated its longstanding view — cemented in a 2004 rule — that national banks can skirt a state law that "obstructs, impairs or conditions" the banking business.
That standard, which state advocates says is too broad, is similar but not identical to language in Dodd-Frank. The reform law — which is favored by the states — said state laws that "prevent or significantly interfere" with banking can be avoided.
In a final rule Wednesday, the agency acknowledged the two standards are not the same, although the variation may be small.
The rule, required by Dodd-Frank, also says operating subsidiaries of national banks must follow state consumer protection laws, federal thrifts will now be subject to the same preemption standards as national banks and the OCC will consult with the new Consumer Financial Protection Bureau on certain preemption issues.
As part of the regulation, the agency said it is reviewing past preemption decisions under the new standard to determine if any should be reversed.
"To the extent that an existing preemption precedent is exclusively reliant on the phrase 'obstructs, impairs, or conditions' as the basis for a preemption determination, we believe that validity of the precedent would need to be reexamined to ascertain whether the determination is consistent with the" new standard, the rule said.
An OCC spokesman said the agency has not found any instances where a preemption case needs to be reevaluated, but the review is ongoing.
But while the rule indicated some backtracking by the OCC — which had faced pushback from the Treasury Department for its May proposal — any difference from the agency's earlier position was still seen as slight.
State advocates argue Dodd-Frank went even further to curb the OCC's authority, and the final rule — which hews closely with the original proposal — is still afar from what lawmakers had wanted.
"It still has a long way to go, we think, to meet the statutory intent," Buz Gorman, a general counsel for the Conference of State Bank Supervisors, said Wednesday.
While the rule alters the preemption standard somewhat, the OCC maintained its position that nothing substantively has changed and that the principles it has used in its preemption policies still largely stand.
"I don't see anything that suggests that the OCC has revisited or departed from that position," said Jeffrey Hare, a partner with DLA Piper in Washington.
Yet some observers noted said the OCC did take a significant step in leaving the 2004 language behind.
"The OCC seems to be more willing to concede that the language in the Dodd-Frank Act could be read as a rejection of the 'obstruct, impair or condition' language in the 2004 rule," said V. Gerard Comizio, a partner with Paul, Hastings, Janofsky & Walker LLP.
Robert Cook, a partner with Hudson Cook LLP, said it is better for the OCC to review questionable preemption determinations now through its own review — and give banks guidance on their validity — before they are potentially overturned by the courts.
"I think that's a good acknowledgement by the OCC, because the phrase 'obstruct, impair or condition' is certainly broader than the standard" before, Cook said.
