A Colorado bill (HB23-1229) that would opt out of Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDA) (codified at 12 U.S.C. 1813d), a federal law enacted to create competitive equality between state-chartered banks and national banks, was approved by both the Colorado Senate and House of Representatives, and will be sent to the Governor shortly.… Continue Reading
Preemption
Opt-Out Deja Vu? Pending Colorado legislation would opt out of federal law allowing interest rate exportation by state banks
Posted in Preemption, Usury
Legislation to opt out of a 43-year-old federal law allowing FDIC-insured state banks to “export” interest on interstate loans to the same extent as their national bank counterparts is quietly, but swiftly, working its way through the Colorado legislature. The bill has passed the House and is expected to be the subject of a hearing next week before a Senate Committee.… Continue Reading
CFPB determines Truth In Lending Act does not preempt New York, California, Utah, and Virginia commercial financing disclosure laws
The CFPB has issued a determination that the Truth in Lending Act (TILA) does not preempt the commercial financing laws of New York, California, Utah, and Virginia. The determination will be effective on the date it is published in the Federal Register.
TILA authorizes the CFPB to determine whether a state law disclosure requirement is preempted upon the CFPB’s own motion or upon the request of a creditor or other interested party. … Continue Reading
SCOTUS asks for Solicitor General’s views on federal preemption of state laws requiring payment of interest on mortgage escrow accounts
The U.S. Supreme Court has invited the Solicitor General to file briefs expressing the views of the United States in two cases involving the question whether state laws requiring the payment of interest on mortgage escrow accounts are preempted for national banks and federal savings associations. The Supreme Court is considering whether to grant the petitions for certiorari filed in the two cases.… Continue Reading
CFPB makes preliminary determinations that Truth in Lending Act does not preempt New York, California, Utah, and Virginia commercial financing disclosure laws
In a notice of “Intent to Make Preemption Determination under the Truth in Lending Act (Regulation Z),” the CFPB announced that it is seeking comments on its preliminary determinations that the Truth in Lending Act (TILA) does not preempt certain provisions of the New York Commercial Finance Disclosure Law (CFDL) or the commercial financing laws of California, Utah, and Virginia. … Continue Reading
Republican lawmakers send questions to OCC on bank-fintech partnerships
By Mindy Harris on
In a letter dated October 11, 2022 to Acting Comptroller Michael J. Hsu, Patrick McHenry, the ranking member of the U.S. House of Representatives Committee on Financial Services, and four other Republican representatives, asked Mr. Hsu to respond to pointed questions about the OCC’s planned role in support of bank-fintech partnerships. … Continue Reading
CFPB issues interpretive rule on FCRA preemption
By John L. Culhane, Jr. & Michael Gordon on
The CFPB has issued an interpretive rule on the scope of the Fair Credit Reporting Act’s preemption provisions. The rule’s narrow reading of those provisions appears intended to encourage and support state legislative efforts to enact laws targeting credit reporting issues of concern to the CFPB, such as the reporting of medical debt.… Continue Reading
Divided Tenth Circuit panel rules national bank’s extended overdraft fee are not “interest” under the NBA
By Ronald K. Vaske on
A divided panel of the U.S. Court of Appeals for the Tenth Circuit has ruled in Walker v. BOKF, National Association that the extended overdraft fees charged by BOKF were not “interest” under the National Bank Act (NBA). The Tenth Circuit’s ruling on what it called “an issue of first impression in this circuit” follows similar rulings by the First and Fifth Circuits.… Continue Reading
Pennsylvania federal court holds Reg J defenses alone do not create federal question jurisdiction
By Ballard CFS Group on
A Pennsylvania federal district court recently held that Regulation J did not completely preempt state law claims related to a wire transfer, and thus did not fall under the “complete preemption” exception to the “well-pleaded complaint rule.” Reg J deals with the collection of checks and other items by Federal Reserve Banks and fund transfers through Fedwire.… Continue Reading
This week’s podcast: Congress overrides the OCC’s true lender rule: what are the risks for banks and their loan program nonbank partners?
By Barbara S. Mishkin on
The OCC’s true lender rule was intended to create a bright line test for when a national bank or federal savings association should be considered the “true lender” in the context of third party partnerships but Congress overturned the rule. After reviewing the relevant background, we examine the Congressional override’s implications for future federal true lender rulemaking and its impact on existing law, key federal and state court challenges and decisions, state legislative and administrative developments, and risk mitigants for bank/nonbank partnerships, including potential loan program structures.… Continue Reading