OCC Reissues Its Preemption Regulations for National Banks and Federal Savings Associations

On Jul 21, 2011, the Office of the Comptroller of the Currency (OCC) published in the Federal Register its final regulations to define the extent to which the National Bank Act (NBA) and the Home Owners' Loan Act (HOLA) preempt state laws for national banks and federal savings associations, respectively. With some impertinent exceptions, the new OCC regulations took effect the same day. In this rulemaking, the OCC, among other things, revised sections 7.4007, 7.4008, and 34.4 of its regulations to conform them to section 1044 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). These three sections, all first promulgated in 2004, purported to define the extent to which the NBA preempted state laws related to deposit taking, non-mortgage lending, and mortgage lending, respectively for national banks. Each section began by stating that any state laws that "obstruct, impair, or condition" a national bank's authority under federal law were preempted.