Sunday, May 29, 2011

FYI: OCC Issues NPRM on Dodd-Frank Preemption Rule Changes, OTS Transfer/Integration, Other Issues

The Office of the Comptroller of the Currency issued the attached notice
of proposed rulemaking, in order to implement several provisions of the
Dodd-Frank Act, including:

(a) Changes to national bank preemption and the OCC's visitorial
authority, as referenced in the OCC's May 12, 2011 responding to
Congressional inquiry (attached); and

(b) Implementing the transfer of functions from the Office of Thrift
Supervision, effective July 21, 2011, including assessment rules and
related payment schedules, rules related to OCC organization, the
availability and release of information, and post-employment restrictions
for senior examiners; and

(c) Implementing a moratorium on changes in control of credit card banks
and trust banks, and revisions to federal branch and agency rules
regarding deposit insurance coverage.

The OCC's proposed preemption and visitorial powers rules would:

(1) "Eliminate any ambiguity concerning the preemption standards in OCC
regulations" by removing language from existing OCC rules that provide
that state laws that "obstruct, impair or condition" a national bank's
powers are preempted, and replacing this standard with that which was
articulated in the whole of decision of the Supreme Court of the United
States in Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance
Commissioner, et al., 517 U.S. 25 (1996) (copy attached), and indicating
that "the phrase 'prevent or significantly interfere' is one exemplary
formulation of conflict preemption," but that this phrase "is not the only
formulation; it is not set apart from the others; and it is not presented
as a test different from the others; rather, it is part of the whole of
the Court's reasoning in its decision," and that "the analysis may not
simply stop and isolate those terms from the rest of the decision," and
that "it is necessary to take into account the whole of the conflict
preemption analysis in the Supreme Court's decision"

(2) Eliminate preemption for national bank and federal thrift operating
subsidiaries; and

(3) Recognize the ability of state attorneys general to bring enforcement
actions in court to enforce non-preempted state laws against national

As part of the integration of the OTS functions into the OCC, the OCC also
indicated that it plans to issue an Interim Final Rule with a request for
comments, effective on the transfer date, that republishes those OTS
regulations the OCC has the authority to promulgate and enforce as of the
transfer date, renumbered and issued as new OCC rules, with nomenclature
and other technical amendments to reflect OCC supervision of Federal
thrifts. The OCC further indicated it will consider more comprehensive
substantive amendments to these regulations, as appropriate, after the
transfer date.

The proposed rule has been published in the Federal Register, and comments
are due by June 27, 2011.

Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874

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