NCSL Opposes Rule Affecting State Authority Over National Banks

The National Conference of State Legislatures (NCSL) has let the Office of the Comptroller of the Currency know that it opposes a proposed rule that would eliminate state authority over national banks and all their diverse range of non-banking operating subsidiaries.

"The OCC proposal threatens to undermine the integrity of the dual banking system and moves toward a centralized, European-style regulatory model," according to NCSL’s written comments signed by Delaware Representative Donna Stone and Illinois Representative Frank Mautino, chair and vice-chair, respectively, of NCSL’s Financial Services Committee. "The OCC proposal would sweep away virtually all state consumer protections and leave banking consumers across the country vulnerable to deceptive trade practices."

The OCC’s rule would supercede all state laws governing national bank activities except in cases when Congress has mandated state-law standards or state laws that have only an "incidental" effect on national banks.

According to NCSL, Stone and Mautino said that the United States’ dual banking system is critical to the strength and vitality of the national economy.

"Unlike in Canada, Europe and other developed countries, the American system has promoted the development of a decentralized banking market where banks of different sizes efficiently distribute credit to all sectors of the U.S. economy to serve the diverse needs of local, regional and national markets," they said. "Regulatory decentralization is especially important to the strength of community banking, which helps disperse decision-making vital to small business lending and job creation across America rather than concentrated in the nation’s financial capitals."

The OCC rule would also prohibit states licensing, examining and regulating state-chartered non-bank subsidiaries of national banks, NCSL reported. This could keep some finance companies as well as title, leasing, mortgage, real estate and check cashing companies from state requirements and consumer protections, NCSL said.

State lawmakers are aggressively asking Congress to tell the OCC to withdraw the proposal and to look closely at the enormous changes that would occur in the nation’s banking system if the rule were enacted.

You may like these other stories...

Individuals interested in reviewing the proposed 2015 US Generally Accepted Accounting Principles (GAAP) taxonomy from the Financial Accounting Standards Board (FASB) have until October 31 to submit their written comments....
Ernst & Young 2013 audit deficiency rate 49%, regulators sayMichael Rapoport of the Wall Street Journal reported on Thursday that the Public Company Accounting Oversight Board (PCAOB) found deficiencies in 28 of the...
PwC must face $1 billion lawsuit over MF Global adviceA federal judge on Wednesday ordered PricewaterhouseCoopers (PwC) to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.