OCC Sends Letter on Dodd-Frank Preemption to Senator Carper

The OCC sent a letter to Senator Thomas R. Carper concerning its interpretation of the federal preemption standard in Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The OCC was writing in response to a letter from Senators Carper and Mark Warner, the authors of Dodd-Frank’s preemption standard, asking the OCC to articulate its interpretation of the standard.

Dodd-Frank provides that a “state consumer financial law” is preempted if, "in accordance with the legal standard for preemption provided by the U.S. Supreme Court in Barnett Bank of Marion County, N. A. v. Nelson, 517 U.S. 25 (1996)," the law “prevents or significantly interferes” with a national bank's execution of its powers.

In response to the portion of the preemption standard in Dodd-Frank that requires preemption to be in accordance with the legal standard for preemption in Barnett, the OCC expressed its view that this language is a directive to apply the conflict preemption standard articulated in Barnett. According to the OCC, this means that the “prevent or significantly interfere” provision in the Dodd-Frank preemption standard is only the starting point in the analysis and that any determination must go on to consider the whole of the conflict preemption analysis in Barnett.

In its letter, the OCC concludes that precedents that are consistent with the principles of the Barnett conflict preemption analysis are preserved, including judicial decisions, interpretations and OCC rules, where preemption was premised on Barnett-based principles of conflict preemption. 

Click here for the OCC letter.