The ability of the Office of the Comptroller of the Currency to shield the mortgage subsidiaries of national banks from complying with state predatory-lending laws would be revoked under a bill introduced by Rep. Barney Frank, D-Mass.The bill (H.R. 5251) is designed to "clarify the relationship between state consumer protection authority and the operation of national banks," Rep. Frank says in letter to potential co-sponsors. The ranking Democrat on the House Financial Services Committee contends that the OCC has gone too far in pre-empting state consumer protection laws and blocking state attorneys general and regulators from protecting their citizens. The bill provides that state authorities can take enforcement actions against national banks that engage in unfair and deceptive practices. In addition, the bill states that the OCC cannot pre-empt state laws with respect to nondepository subsidiaries of national banks. In January, the OCC issued regulations that pre-empt state laws that limit or impede the lending activities of national banks and their operating subsidiaries. Earlier attempts to completely overturn the OCC's regulations have failed.

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