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THe baNKING laW JourNal

eral savings associations and their subsidiaries as if they were national banks or their subsidiaries. The modified statutes should prevent the OCC from categorically preempting state enforcement actions against national banks, federal savings associations and their subsidiaries. Recall, however, that these changes do not affect other federal laws that preempt state enforcement ac- tions, including the provision of the CFP Act prohibiting state enforcement of the Act against national banks and federal thrifts.52


It is unclear how these provisions will affect the regulatory landscape fac- ing national banks and federal thrifts. Will banks and thrifts be subject to more state supervision? It depends on the OCC’s enthusiasm for preempting state law and courts’ willingness to defer to or approve OCC determinations. Will banks and thrifts roll-up their subsidiaries? It depends on how they balance the benefit of having legally distinct subsidiaries and affiliates against the increased burden of complying with a panoply of differing state oversight systems. Are they going to face more enforcement actions at the state level? Perhaps, but increased state litigation against national banks was likely after Cuomo even without the Act. Do state banks have an incentive to convert to national banks? Once again, it depends on the extent to which the OCC exercises its preemption authority, as well as the location of the bank, whether the bank has subsidiaries or affiliates, and how the burdens imposed by the state compare to those imposed by federal law.

The full impact of these modifications probably will not be seen until they become effective on July 21, 2011. Once states begin pursuing enforce- ment actions and the Bureau and the OCC start to preempt state law, the overall effect of these changes will become apparent. In the meantime, banks, thrifts and other affected entities should begin to take a closer look at how the CFP Act may alter their regulatory requirements.




Pub. L. No. 111-203, 124 Stat. 1376 (2010). The CFP Act is title X of Dodd-Frank, which spans sections 1001-1100H.


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