The chief author of legislation to roll back the Comptroller of the Currency’s powers to preempt state consumer protection laws says he doesn’t want a bureaucrat “acting” as the comptroller to approve new rules governing the preemption provisions of the Dodd-Frank Act.
“I think an acting Comptroller should not set rules of this importance,” said Rep. Barney Frank, D-Mass. “These rules should not be finalized until a permanent head of OCC is in place.” (President Obama has announced his intention to nominate FDIC director Thomas Curry to be the new comptroller and chief supervisor of national banks. The former Massachusetts commissioner of banks must be conferred by the Senate.)
For nearly two decades, OCC expanded its preemptive powers through regulations and the courts to shield national banks from state consumer protections. This allowed national banks to ignore state laws curbing subprime and predatory lending practices in the years leading up to the financial crisis.
Acting comptroller John Walsh recently issued a proposed rule to implement the preemption provisions, but only offered a 30-day comment period.
Preemption critics, such as the National Association of Attorneys General, were aghast when they read the OCC proposal. “Unfortunately, the OCC’s current proposal maintains the very same preemption rules that were rejected by Congress in Dodd-Frank,” NAAG said. The state AGs urged OCC to withdraw the entire preemption proposal.
Treasury Department officials also expressed concerns that OCC had ignored congressional intent. OCC is a bureau of the Treasury Department.
Meanwhile, Rep. Frank and four other Democrats on the Financial Services Committee urged OCC to extend the 30-day comment period, which ends July 8, by at least 60 days.
“In light of the history of the OCC’s previous preemption rulemaking,” the Democrats say, “we urge OCC to reopen the comment period for at least 60 additional days.”
On Friday morning, OCC issued a release extending the comment period to August 8.
