The Office of the Comptroller of the Currency (OCC) received many comment letters strongly criticizing its May 26 preemption proposal. Unfortunately, the OCC largely ignored those criticisms and wrote final rules that blatantly violate the Dodd-Frank Act.  

The law states unambiguously: “State consumer financial laws are preempted, only if” the OCC or a court determines, “in accordance with the legal standard for preemption” in the Supreme Court’s 1996 Barnett decision, that “the State consumer financial law prevents or significantly interferes with the exercise by the national bank of its powers.” (This language appears in section 1044(b)(1)(B).) Thus, Congress specifically incorporated a phrase from Barnett — “prevents or significantly interferes” — as “the legal standard for preemption” for national banks.

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