Considering all the dramatic recent events in the financial services industry, a little-noted provision buried deep in the 700-page Housing and Economic Recovery Act threatens to reignite the debate over federal preemption.

As American Banker noted following the Washington Mutual collapse, "Many have raised questions about the OTS' supervisory performance." ["Wamu Vanishes, So May OTS and the Thrift Charter," Sept. 29]. It seems fair to ask whether an agency whose performance — indeed, its viability — is in question should exercise broad powers of preemption shutting states out of the consumer protection business, even when it comes to mortgages marketed by third parties.

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