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
Preemption
Republican lawmakers send questions to OCC on bank-fintech partnerships
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
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
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
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?
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
Dept. of Education issues new interpretation on preemption of state laws regulating student loan servicers
The U.S. Department of Education has issued a new interpretation “to revise and clarify its position on the legality of State laws and regulations that govern various aspects of the servicing of Federal student loans.” The new interpretation revokes and supersedes the ED’s 2018 preemption determination. It was not unexpected, as the ED has taken a number of steps in recent months to reverse Trump Administration policies that hindered state oversight of federal student loan servicers. … Continue Reading
State AGs file opposition to FDIC’s summary judgment motion in lawsuit challenging “Madden-fix” rule
The state attorneys general have filed their opposition to the FDIC’s motion for summary judgment in their lawsuit to set aside the FDIC’s “Madden-fix” rule. The filing also includes the AGs’ reply to the FDIC’s opposition to their summary judgment motion.
The lawsuit is pending before the same California federal district court judge (Judge Jeffrey S.… Continue Reading
Petitioners in FAA Preemption Case Receive Support of Industry Groups in Brief filed by Ballard Spahr with Supreme Court
On June 11, the American Bankers Association and the Consumer Bankers Association, represented by Ballard Spahr, filed an amicus brief in support of a petition for certiorari asking the Supreme Court to review the Ninth Circuit’s ruling in HRB Tax Group, Inc. v. Snarr that the Federal Arbitration Act (FAA) does not preempt California’s McGill rule. … Continue Reading
Second Circuit orders dismissal for lack of standing of New York DFS lawsuit challenging OCC fintech charter
The U.S. Court of Appeals for the Second Circuit has ruled that the lawsuit filed by the New York Department of Financial Services (DFS) seeking to block the OCC’s issuance of special purpose national bank (SPNB) charters to non-depository fintech companies should be dismissed for lack of Article III standing. In December 2017, the DFS’s first lawsuit challenging the OCC’s issuance of SPNB charters was also dismissed for lack of Article III jurisdiction.… Continue Reading