This site dedicated to OCC watching offers a little background for us in the changes being made with banking rules.
In January, 2004 the OCC issued two related and sweeping rules, one preempting nearly all state and local consumer laws (the “preemption rule”) [69 Fed. Reg. 1904 (2004)] and the other restricting nearly all enforcement powers of state regulators and attorneys general (the “visitorial powers rule.”) [69 Fed. Reg. 1895 (2004)] over national banks, and incredibly, their state-licensed operating subsidiaries, which are not banks.
The issuance of the OCC rules has sparked a bi-partisan storm of protest from state legislatures, state financial regulators and state attorneys general. The attorneys general particularly criticized the OCC’outrageous characterization that the “National Bank Act protect[s] national banks from potential state hostility…” Calling the states “hostile” does not advance any legitimate argument. See the OCC Watch Coalition Partner Links page for more information.
Even the normally complacent House Financial Services Committee has weighed in. In addition to holding OCC oversight hearings, it has passed a bi-partisan budget resolution on a vote of 34-28 stating that the OCC action “may represent an unprecedented expansion of Federal preemption authority” and “comes without congressional authorization, and without a corresponding increase in budget resources for the agency.” The committee also pointed out that without a budget increase, the OCC cannot really expect its modest staff of 40 consumer complaint specialists and approximately 100 examiners to both continue their own work and also take over much of the work of an estimated 700 state consumer enforcers and examiners. “In the area of abusive mortgage lending practices alone, State bank supervisory agencies initiated 20,332 investigations in 2003 in response to consumer complaints, which resulted in 4,035 enforcement actions”.
Two points to be made:
1. The size of the department makes regulation moot given the responsibilities.
2. The national bank is not subject to state regulations, but also the state subsidiaries of that bank.
Since the trend is not new but was accelerated since after 2000, would state regulation have been able to help with the bank situation? Is the lack of staff with huge increases in responsibility another way to lessen regulatory effectiveness? Was that the intent? And how does that square with the press release by the OCC here?
Step by step information to be had….there are two lists compare. Perhaps a call to each state AG could obtain more information. If you call in CA, make sure to mention cactus’s problem.