OCC Approves Pre-emption Rule
The Office of the Comptroller of the Currency has approved a final rule that frees national banks and their mortgage subsidiaries from complying with state predatory lending laws. The final rule builds on a series of court decisions and OCC interpretations, according to Comptroller John Hawke Jr., and it allows the OCC to pre-empt specific types of state laws that interfere with the lending activities and other powers of national banks. The final rule also establishes an anti-predatory-lending standard for national banks. "We have seen only isolated cases of abusive practices among nationals banks," the comptroller said. "But when we have identified problems, we have taken quick and effective action." State attorneys general, legislators, and bank supervisors registered their opposition to the proposed rule. And New York Attorney General Eliot Spitzer has threatened to sue the OCC if the pre-emption rule is finalized.

NY AG Blasts OCC Pre-emption Rule
New York Attorney General Eliot Spitzer has called the Comptroller of the Currency's action to shield national banks from state predatory lending laws "ill-advised" and said he will sue, if necessary, to protect New Yorkers. "Today's attempt by the OCC to immunize national banks from state consumer protection laws, including those applying to predatory lending, is shamefully wrong," Mr. Spitzer said. He said the OCC's new regulations would not deter him from suing to protect New York consumers from deceptive or illegal conduct engaged in by national banks in New York. The OCC has finalized one proposal that pre-empts specific types of state laws that interfere with the lending activities and other powers of national banks and a second proposal that blocks state and local enforcement officials from auditing or investigating national banks and their mortgage subsidiaries. The American Bankers Association welcomed the OCC's action. But the Conference of State Bank Supervisors said they were "stunned" by the OCC's decision to finalize the rules, considering the concerns expressed by key members of Congress and state officials. "The arrogance and audacity of the comptroller's actions are astonishing," CSBS president Neil Milner said.

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ACA Release #1458