OCC Pre-emption Regs Stirring the Pot

The comptroller of the currency's decision to issue two controversial regulations that pre-empt state predatory lending laws and shield national banks from state enforcement is expected to be the subject of very hot hearings after Congress returns.Sen. Paul Sarbanes, D-Md., is not happy with the OCC's decision to issue the two final rules. "This extreme position unnecessarily and irresponsibly undermines critical consumer protections," a spokesman for Sen. Sarbanes said. In early December, Sen. Sarbanes and nine other Democrats on the Senate Banking Committee urged Comptroller John Hawke to abandon his pre-emption agenda and start enforcing state predatory lending laws. Mr. Hawke is slated to testify before the banking committee in early February along with other regulators to discuss the state of the banking industry. Meanwhile, Rep. Sue Kelly, R-N.Y., is gearing up to hold a hearing on the OCC's action. "The laws of 50 states should not be pre-empted by a federal regulator without public debate," Rep. Kelly said. "The OCC is tasked with interpreting congressional intent, and it will now have to justify its decision to Congress." The congresswoman chairs the House Financial Services oversight and investigations subcommittee.