Acting comptroller of the currency Rodney Hood defended federal preemption regulations employed by the Office of the Comptroller of the Currency (OCC) in a letter to the Conference of State Bank Supervisors (CSBS).
Hood’s comments were in response to the CSBS’s request that the OCC rescind its preemption regulations following two executive orders (EOs) from President Donald Trump – EO 14219, “Ensuring Lawful Governance and Implementing the President’s ‘Department of Government Efficiency’ Deregulatory Initiative” and EO 14267, “Reducing Anti-Competitive Regulatory Barriers.”
Hood asserted the regulations in question are consistent with federal law and Supreme Court precedent, making national banks and federal savings associations exempt from state-level regulations that interfere with their ability to exercise powers granted to them under federal law.
“Contrary to your assertions, the OCC’s preemption regulations are wholly consistent with Dodd-Frank and Supreme Court precedent and thus meet the requirements of EO 14219,” Hood wrote. “For your awareness, the OCC reviewed its preemption regulations following Dodd–Frank’s enactment. The OCC considered the relevant statutory language, legislative history, and judicial precedent and concluded that Dodd–Frank codified the conflict preemption standard in Barnett Bank of Marion County, N.A. v. Nelson, including the antecedent cases it cited.”
To further support his conclusion, Hood cited the Supreme Court’s subsequent decision in Cantero v. Bank of America, N.A., in which the court rejected arguments suggesting Dodd-Frank established a new preemption standard.
“You also suggest that the OCC’s preemption regulations are anti-competitive. This not the case,” Hood wrote. “In addition, the OCC’s regulations are consistent with EO 14267. Federal preemption is a cornerstone of the dual banking system, under which federally and state-chartered banks operate alongside one another. As the Supreme Court recognized in Cantero, this system allows federally and state-chartered banks to ‘co-exist and compete.’”
He further contended preemption is a cornerstone of the dual banking system that enables prosperity and growth at both the local and national levels.