[StBernard] House Democrats Request Extension for OCC's Proposed Rule on Preemption

[Westley Annis]

House Democrats Request Extension for 

OCC's Proposed Rule on Preemption


WASHINGTON - Five senior Members of the House Financial Services sent a
letter to John Walsh, Acting Comptroller of the Currency (OCC), requesting
that he extend the comment period for the proposed rule on preemption and
visitorial powers for national banks for at least 60 days.  The Members,
Representatives Barney Frank, Carolyn Maloney, Luis Gutierrez, Mel Watt and
Brad Miller, wrote that the original 30-day comment period was "insufficient
to foster a meaningful and balanced exchange of views between the OCC and
other interested parties..." 

 

The Members made their request "in light of the OCC's previous preemption
rulemaking" and "the clear gravity of preemption determinations generally."
In the period leading to the mortgage crisis, the OCC had preempted state
anti-predatory lending statutes.

 

In a separate statement, Frank, the Ranking Member of the Financial Services
Committee, added that the question of the issue of the length of the comment
period is compounded by the fact that the permanent head of the agency has
not yet been appointed.  "I think an Acting Comptroller should not set rules
of this importance," said Frank. "These rules should not be finalized until
a permanent head of the OCC is in place."

 

 

Text of the letter follows:

 

Mr. John Walsh

Acting Comptroller of the Currency

Office of the Comptroller of the Currency

250 E Street, S.W.

Washington, DC 20219

 

Dear Acting Comptroller Walsh:

 

We are writing to urge you to reopen the comment period for the proposed
rule to revise the provisions of 12 CFR part 7 relating to preemption and
visitorial powers for national banks.  The original comment period, which
closed on June 27, was for only 30 days, which we strongly believe was
insufficient to foster a meaningful and balanced exchange of views between
the OCC and other interested parties, including consumers; state and federal
regulators; members of Congress, particularly those of us who voted to alter
substantially the preexisting standards governing preemption and visitorial
powers; and depository institutions.  In light of the importance of the
preemption and visitorial powers issues to the aforementioned parties and
the significant substantive and procedural changes that the Wall Street
Reform and Consumer Protection Act required in these areas, we agree with
the Conference of State Bank Supervisors that an extension of the comment
period by at least 60 days is warranted. 

 

In making this request, we note that it is common for an agency to allow
more than 30 days for the public to comment on a rulemaking that raises
particularly significant policy issues, such as the rulemaking in question
here.  Indeed, the OCC provided a 60-day comment period when proposing its
original preemption rule in 2003.  The current rulemaking, like the one in
2003, invokes the special requirements of Executive Order 13132, the
principles of which were reiterated in President Obama's Executive Memo on
Preemption dated May 20, 2009.   Executive Order 13132 provides that an
agency seeking to preempt state law must provide all affected state and
local officials with an opportunity for "appropriate participation in the
proceeding," and the GAO determined that the OCC's 2003-2004 preemption
rulemaking process was flawed in part because the GAO could not verify that
the OCC complied with this requirement.   

 

In light of the history of the OCC's previous preemption rulemaking, the
clear gravity of preemption determinations generally, and the particular
issues associated with this rulemaking as a result of the preemption and
visitorial power provisions of the Wall Street Reform and Consumer Protect
Act, the OCC should provide an even longer comment period for this
rulemaking than it did when proposing the original preemption rule that is
to be affected thereby.  Accordingly, we urge the OCC to reopen the comment
period for its rulemaking regarding preemption and visitorial powers for at
least 60 additional days.

 

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