Law Commons^™

The Second Circuit's Cantero Decision Is Wrong About Preemption Under The National Bank Act, Arthur E. Wilmarth Jr.

GW Law Faculty Publications & Other Works

On September 15, 2022, the Second Circuit Court of Appeals issued its decision in Cantero v. Bank of America, N.A. Cantero held that the National Bank Act (NBA) preempted the application to national banks of a New York law requiring home mortgage lenders to pay a minimum rate of interest on mortgage escrow accounts. The Second Circuit declared that New York’s “minimum-interest requirement would exert control over a banking power granted by the federal government, so it would impermissibly interfere with national banks’ exercise of that power.”

The Second Circuit’s decision is clearly erroneous and should be rejected by the …

Policy Brief: The Occ’S Repeated Failures To Comply With The Dodd-Frank Act And Other Legal Authorities Governing The Scope Of Preemption For National Banks And Federal Savings Associations, Arthur E. Wilmarth Jr.

GW Law Faculty Publications & Other Works

This policy brief examines several failures by the Office of the Comptroller of the Currency (OCC) to comply with the Dodd-Frank Act and other legal authorities governing the scope of preemption for national banks and federal savings associations. The policy brief argues that the OCC should promptly rescind or revise several of its existing rules, policies, and legal interpretations to bring those materials into compliance with the Dodd-Frank Act and other applicable laws.

Comment Letter In Opposition To The Occ's Proposed "Valid-When-Made" Rule, Arthur E. Wilmarth Jr.

GW Law Faculty Publications & Other Works

This comment letter responds to a proposed rule issued by the Office of the Comptroller of the Currency (OCC), which would “codify” an alleged federal common-law “principle” known as “valid-when-made.” The proposed rule would amend two of the OCC’s regulations – 12 C.F.R. 7.4001 and 12 C.F.R. 160.110 – by providing that “interest on a loan that is permissible” for a national bank or a federal savings association, under 12 U.S.C. 85 or 12 U.S.C. 1463(g)(1), “shall not be affected by the sale, assignment, or other transfer of the loan.” 84 Fed. Reg. 64229, 64230-31 (Nov. 21, 2019). Thus, the …

The Occ's And Fdic's Attempts To Confer Banking Privileges On Nonbanks And Commercial Firms Violate Federal Laws And Are Contrary To Public Policy, Arthur E. Wilmarth Jr.

GW Law Faculty Publications & Other Works

The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) have adopted several recent measures that attempt to confer benefits and privileges of banks on nonbank providers of financial services and commercial firms. The OCC’s and FDIC’s initiatives are unlawful and dangerous because they would allow nonbanks and commercial firms to subvert fundamental public policies embodied in federal laws governing banks and bank holding companies.

In 2018, the OCC announced that it would approve national bank charters for “fintech” firms that provide lending and payment services but do not accept deposits. The New York …

Comment Letter In Opposition To The Occ's Proposed "True Lender" Rule, Arthur E. Wilmarth Jr.

GW Law Faculty Publications & Other Works

This comment letter opposes the adoption of a proposed rule published by the Office of the Comptroller of the Currency (“OCC”) on July 22, 2020. 85 Fed. Reg. 44223 (2020). The proposed rule would determine whether a national bank or federal savings association “makes a loan and is the ‘true lender’ in the context of a partnership between a bank and a third party, such as a marketplace lender.” Id. The proposed rule – to be codified at 12 C.F.R. 7.1031 – would provide that a national bank or federal savings association is deemed to “make” a loan if the …

The Dodd-Frank Act's Expansion Of State Authority To Protect Consumers Of Financial Services, Arthur E. Wilmarth Jr.

GW Law Faculty Publications & Other Works

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) created the Consumer Financial Protection Bureau (CFPB) and delegated to CFPB the combined rulemaking and enforcement authorities of seven federal agencies that previously were responsible for protecting consumers of financial services. Congress decided to establish a single federal authority dedicated to consumer financial protection after federal banking agencies failed to protect American homeowners from unsound and predatory lending practices during the housing boom that occurred between 2001 and 2006. Federal regulators allowed lenders to make more than 10 million high-risk mortgages during those years. When the housing bubble burst in …

Process-Based Preemption, Bradford R. Clark

GW Law Faculty Publications & Other Works

The question of preemption arises because the Constitution establishes a federal system with two governments (one federal and one state) that have overlapping power to regulate the same matters involving the same parties in the same territory. To succeed, such a system requires a means of deciding when federal law displaces state law. The Founders chose the Supremacy Clause (reinforced by Article III) to perform this function. Although seemingly one-sided, the Clause actually incorporates several important political and procedural safeguards designed to preserve the proper balance between the governance prerogatives of the federal government and the states. It does this …

Access To Courts And Preemption Of State Remedies In Collective Action Perspective, Robert L. Glicksman, Ricard Levy

GW Law Faculty Publications & Other Works

Preemption of common law remedies for individual injuries such as harm to health raises fundamental questions about the proper allocation of authority between the federal and state governments and about the role of courts in interpreting statutes and providing remedies for those who suffer injuries. Developing a workable framework for analyzing what we call “remedial preemption” issues can help to ensure an appropriate accommodation of the federal and state interests at stake and promote consistent application of preemption doctrine to state judicial remedies. This article applies a “collective action” framework for preemption analysis to the issue of remedial preemption. Our …

Nothing Is Real: Protecting The Regulatory Void Through Federal Preemption By Inaction, Robert L. Glicksman

GW Law Faculty Publications & Other Works

Whether a federal statute preempts state law has important implications for the allocation of power between the federal and state governments. One aspect of preemption doctrine that has received relatively little scholarly attention is whether the federal government's failure to act is capable of preempting state law and, if so, when. In the regulatory context, Congress must first decide whether as a normative matter it should preempt state law despite its decision not to regulate activities regulated by states. Once Congress has done so, the courts may need to interpret federal legislation to determine whether Congress has decided to preempt …

A Collective Action Perspective On Ceiling Preemption By Federal Environmental Regulation: The Case Of Global Climate Change, Robert L. Glicksman, Richard E. Levy

GW Law Faculty Publications & Other Works

In an era of regulatory skepticism, proponents of regulation in general and environmental regulation in particular face a number of new political and legal hurdles, particularly at the federal level. Frustrated with federal inaction or weak federal regulation, it is increasingly common for states and local governments to adopt environmental laws that seek to provide greater environmental protection. The critical question is when federal environmental law provides a ceiling, preempting such state regulatory programs. In this article, which is part of a forthcoming symposium on federal preemption in the Northwestern Law Review, Professors Glicksman and Levy develop a framework for …

Occ V. Spitzer: An Erroneous Application Of Chevron That Should Be Reversed, Arthur E. Wilmarth Jr.

GW Law Faculty Publications & Other Works

This essay criticizes OCC v. Spitzer (S.D.N.Y. 2005), a recent federal court decision dealing with the application of state laws to national banks. The court upheld a regulation issued by the Office of the Comptroller of the Currency ("OCC"), the federal agency that supervises national banks. The OCC's regulation preempts the authority of state officials to file suit in state or federal courts to enforce state laws against national banks. The OCC's regulation asserts that any decision about whether to enforce state laws against national banks is a matter "within the OCC's exclusive purview."

Based on the OCC's regulation, the …

From Cooperative To Inoperative Federalism: The Perverse Mutation Of Environmental Law And Policy, Robert L. Glicksman

GW Law Faculty Publications & Other Works

Beginning in 1970, Congress adopted a series of statutes to protect public health and the environment that represented an experiment in cooperative federalism. The operative principle of cooperative federalism is that the federal government establishes a policy - such as protection of public health and the environment and sustainable natural resource use - and then enlists the aid of the states, through a combination of carrots and sticks, in pursuing that policy. The result is a system in which both levels of government work together to achieve a common goal. If the process works well, the synergism of related federal …

The Occ's Preemption Rules Exceed The Agency's Authority And Present A Serious Threat To The Dual Banking System And Consumer Protection, Arthur E. Wilmarth Jr.

GW Law Faculty Publications & Other Works

In January 2004, the Office of the Comptroller of the Currency (OCC) issued new regulations that are intended to preempt a broad range of state laws from applying to national banks and their operating subsidiaries. The OCC's rules declare that state laws are preempted if they obstruct, impair, or condition a national bank's ability to fully exercise its federally-authorized powers, either directly or through operating subsidiaries. According to the OCC, state laws apply to national banks only to the extent that state laws provide the legal infrastructure that makes it practicable for national banks to do business. The OCC's new …