The OCC issued two regulations today designed to protect national banks at the expense of consumers. One would broadly preempt all state laws against national banks, including predatory lending laws, leaving only narrow exceptions for contracts, debt collection, acquisition and transfer of property, taxation, criminal, zoning and tort laws. The other would confer upon the OCC exclusive jurisdiction over national banks, and specifically exclude state attorneys general from enforcing consumer protection laws against national banks. Together, the two regulations would prevent the states from enacting or enforcing almost any law against national banks, including consumer protection laws of general applicability that apply to every other business in the state. They would also result in an unprecedented expansion of the OCC's powers, while at the same time shielding the banks from state enforcement officials charged with protecting their citizens from fraudulent and illegal conduct.
Spitzer noted that when the OCC issued its proposed regulations, they were opposed by a bi-partisan coalition of state officials. Indeed, in October all 50 state attorneys general submitted comments to the OCC opposing the proposed regulations.
Spitzer said that the OCC's new regulations would not deter him from suing to protect New York consumers from deceptive or illegal conduct engaged in by national banks in New York. "The OCC can not, by administrative fiat, take away protections to which New York consumers have always been entitled, nor can it take away states' powers to enforce those laws," Spitzer said.
Spitzer also said that the OCC's claim that it can respond to predatory lending and other consumer protection issues without the states' help is specious. Spitzer noted that the OCC devotes the vast majority of its time and resources to monitoring the safety and soundness of its institutions, and does not have the states' experience, expertise, resources or record in addressing consumer protection issues.
