Preservation of Federalism in Banking Act - Amends the Revised Statutes of the United States and the Home Owners' Loan Act to declare applicable to either a national bank or federal savings association any consumer protection in state consumer law of general application (including unfair or deceptive acts or practices, consumer fraud law and repossession, foreclosure, and collection).
Declares that when a national bank or federal savings association avails itself of state law for its benefit, all related consumer protections in such state law shall apply.
Declares applicable to a national bank or federal savings association: (1) state banking or thrift laws enacted pursuant to federal law; and (2) state laws providing greater protection in high cost mortgage loans (predatory mortgage loans).
Permits the Comptroller of the Currency to preempt state law only when a comparable federal statute or regulation pursuant to a federal statute, other than this Act, expressly governs the activity.
States that any federal law relating to visitorial powers or which otherwise limits or restricts the supervisory, examination, or regulatory authority to which a national bank or federal savings association is subject shall not be construed as restricting the authority of any chief state law enforcement officer to bring an action on behalf of state residents to enforce federal or state law, or to seek relief and recover damages for violations by a national bank or federal savings association.
Prescribes procedural guidelines requiring the Comptroller and the Director of the Office of Thrift Supervision to record and monitor consumer complaints regarding either a national bank or a federal savings association, respectively.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3426 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 3426
To clarify the applicability of State law to national banks and Federal
savings associations, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 26, 2005
Mr. Gutierrez (for himself, Mr. Frank of Massachusetts, Ms. Lee, and
Mrs. McCarthy) introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To clarify the applicability of State law to national banks and Federal
savings associations, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Preservation of Federalism in
Banking Act''.
TITLE I--NATIONAL BANKS
SEC. 101. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS CLARIFIED.
(a) In General.--Chapter One of title LXII of the Revised Statutes
of the United States (12 U.S.C. 21 et seq.) is amended by inserting
after section 5136B the following new section:
``SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND
SUBSIDIARIES CLARIFIED.
``(a) State Consumer Laws of General Application.--
``(1) In general.--Notwithstanding any other provision of
Federal law, any consumer protection in State consumer law of
general application (including any law relating to unfair or
deceptive acts or practices, any consumer fraud law and
repossession, foreclosure, and collection) shall apply to any
national bank.
``(2) National bank defined.--For purposes of this section,
the term `national bank' includes any Federal branch
established in accordance with the International Banking Act of
1978.
``(b) State Laws Related to Laws Used by National Banks for Their
Benefit.--When a national bank avails itself of a State law for its
benefit, all related consumer protections in State law shall apply.
``(c) State Banking Laws Enacted Pursuant to Federal Law.--
``(1) In general.--Notwithstanding any other provision of
Federal law and except as provided in paragraph (2), any State
law that--
``(A) is applicable to State banks; and
``(B) was enacted pursuant to or in accordance
with, and is not inconsistent with, an Act of Congress,
including the Gramm-Leach-Bliley Act, the Consumer
Credit Protection Act, and the Real Estate Settlement
Procedures Act, that explicitly or by implication,
permits States to exceed or supplement the requirements
of any comparable Federal law,
shall apply to any national bank.
``(2) Exceptions.--Paragraph (1) shall not apply with
respect to any State law if--
``(A) the State law discriminates against national
banks; or
``(B) State law is inconsistent with provisions of
Federal law other than this title LXII, but only to the
extent of the inconsistency (as determined in
accordance with the provision of the other Federal
Law).
``(d) State Laws Protecting Against Predatory Mortgage Loans.--To
the extent not otherwise addressed in this section, State laws
providing greater protection in high cost mortgage loans, however
denominated, both in coverage and content, than is provided under the
Truth in Lending Act (including the provisions amended by the Home
Ownership and Equity Protection Act of 1994) shall apply to any
national bank.
``(e) Comparable Federal Regulation Required.--In relation to the
regulation of consumer credit and deposit transactions, the Comptroller
may preempt State law pursuant to this title only when there is a
comparable Federal statute, or regulations pursuant to a Federal
statute other than this title, expressly governing the activity, except
in relation to interest pursuant to section 5197.
``(f) No Negative Implications for Applicability of Other State
Laws.--No provision of this section shall be construed as altering or
affecting the applicability, to national banks, of any State law which
is not described in this section.
``(g) Effect of Transfer of Transaction.--A transaction that is not
entitled to preemption at the time of the origination of the
transaction does not become entitled to preemption under this title by
virtue of its subsequent acquisition by a national bank.
``(h) Denial of Preemption not a Deprivation of a Civil Right.--The
preemption of any provision of the law of any State with respect to any
national bank shall not be treated as a right, privilege, or immunity
for purposes of section 1979 of the Revised Statutes of the United
States (42 U.S.C. 1983).
``(i) Definition.--For purposes of this section, the terms
`includes' and `including' have the same meaning as in section 3(t) of
the Federal Deposit Insurance Act.''.
(b) Clerical Amendment.--The table of sections for chapter One of
title LXII of the Revised Statutes of the United States is amended by
inserting after the item relating to section 5136B the following new
item:
``5136C. State law preemption standards for national banks and
subsidiaries clarified.''.
SEC. 102. VISITORIAL STANDARDS.
Section 5136C of the Revised Statutes of the United States (as
added by section 101(a) of this Act) is amended by adding at the end
the following new subsections:
``(j) Visitorial Powers.--No provision of this title which relates
to visitorial powers or otherwise limits or restricts the supervisory,
examination, or regulatory authority to which any national bank is
subject shall be construed as limiting or restricting the authority of
any attorney general (or other chief law enforcement officer) of any
State to bring any action in any court of appropriate jurisdiction--
``(1) to enforce any applicable Federal or State law, as
authorized by such law; or
``(2) on behalf of residents of such State, to enforce any
applicable provision of any Federal or State law against a
national bank, as authorized by such law, or to seek relief and
recover damages for such residents from any violation of any
such law by any national bank.
``(k) Enforcement Actions.--The ability of the Comptroller to bring
an enforcement action under this title or section 5 of the Federal
Trade Commission Act does not preclude private parties from enforcing
rights granted under Federal or State law in the courts.''.
SEC. 103. CLARIFICATION OF LAW APPLICABLE TO STATE-CHARTERED
NONDEPOSITORY INSTITUTION SUBSIDIARIES.
Section 5136C of the Revised Statutes of the United States (as
added by section 101(a) of this Act) is amended by inserting after
subsection (k) (as added by section 102) the following new subsection:
``(l) Clarification of Law Applicable to Nondepository Institution
Subsidiaries and Affiliates of National Banks; Definitions.--
``(1) In general.--No provision of this title shall be
construed as preempting the applicability of State law to any
State-chartered nondepository institution, subsidiary, other
affiliate, or agent of a national bank.
``(2) Definitions.--For purposes of this section, the
following definitions shall apply:
``(A) Depository institution, subsidiary,
affiliate.--The terms `depository institution',
`subsidiary', and `affiliate' have the same meanings as
in section 3 of the Federal Deposit Insurance Act.
``(B) Nondepository institution.--The term
`nondepository institution' means any entity that is
not a depository institution.''.
SEC. 104. DATA COLLECTION AND REPORTING.
(a) Collecting and Monitoring Consumer Complaints.--
(1) In general.--The Comptroller of the Currency shall
record and monitor each complaint received directly or
indirectly from a consumer regarding a national bank or any
subsidiary of a national bank and record the resolution of the
complaint.
(2) Factors to be included.--In carrying out the
requirements of paragraph (1), the Comptroller of the Currency
shall include--
(A) the date the consumer complaint was received;
(B) the nature of the complaint;
(C) when and how the complaint was resolved,
including a brief description of the extent, and the
results, of the investigation made by the Comptroller
into the complaint, a brief description of any notices
given and inquiries made to any other Federal or State
officer or agency in the course of the investigation or
resolution of the complaint, a summary of the
enforcement action taken upon completion of the
investigation, and a summary of the results of
subsequent periodic reviews by the Comptroller of the
extent and nature of compliance by the national bank or
subsidiary with the enforcement action; and
(D) if the complaint involves any alleged violation
of a State law (whether or not Federal law preempts the
application of such State law to such national bank) by
such bank, a cite to and a description of the State law
that formed the basis of the complaint.
(b) Report to the Congress.--
(1) Periodic reports required.--The Comptroller of the
Currency shall submit a report semi-annually to the Congress on
the consumer protection efforts of the Office of the
Comptroller of the Currency.
(2) Contents of report.--Each report submitted under
paragraph (1) shall include the following:
(A) The total number of consumer complaints
received by the Comptroller during the period covered
by the report with respect to alleged violations of
consumer protection laws by national banks and
subsidiaries of national banks.
(B) The total number of consumer complaints
received during the reporting period that are based on
each of the following:
(i) Each title of the Consumer Credit
Protection Act (reported as a separate
aggregate number for each such title).
(ii) The Truth in Savings Act.
(iii) The Right to Financial Privacy Act of
1978.
(iv) The Expedited Funds Availability Act.
(v) The Community Reinvestment Act of 1977.
(vi) The Bank Protection Act of 1968.
(vii) Title LXII of the Revised Statutes of
the United States.
(viii) The Federal Deposit Insurance Act.
(ix) The Real Estate Settlement Procedures
Act of 1974.
(x) The Home Mortgage Disclosure Act of
1975.
(xi) Any other Federal law.
(xii) State consumer protection laws
(reported as a separate aggregate number for
each State and each State consumer protection
law).
(xiii) Any other State law (reported
separately for each State and each State law).
(C) A summary description of the resolution efforts
by the Comptroller for complaints received during the
period covered, including--
(i) the average amount of time to resolve
each complaint;
(ii) the median period of time to resolve
each complaint;
(iii) the average and median time to
resolve complaints in each category of
complaints described in each clause of
subparagraph (B); and
(iv) a summary description of the longest
outstanding complaint during the reporting
period and the reason for the difficulty in
resolving such complaint in a more timely
fashion.
(3) Disclosure of report on occ website.--Each report
submitted to the Congress under this subsection shall be
posted, by the Comptroller of the Currency, in a timely fashion
and maintained on the website of the Office of the Comptroller
of the Currency on the World Wide Web.
TITLE II--SAVINGS ASSOCIATIONS
SEC. 201. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS
ASSOCIATIONS CLARIFIED.
(a) In General.--The Home Owners' Loan Act (12 U.S.C. 1461 et seq.)
is amended by inserting after section 5 the following new section:
``SEC. 6. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS
ASSOCIATIONS AND AFFILIATES CLARIFIED.
``(a) State Consumer Laws of General Application.--Notwithstanding
any other provision of Federal law, any consumer protection in State
consumer law of general application (including any law relating to
unfair or deceptive acts or practices, any consumer fraud law and
repossession, foreclosure, and collection) shall apply to any Federal
savings association.
``(b) State Laws Related to Laws Used by Federal Savings
Associations for Their Benefit.--When a Federal savings association
avails itself of a State law for its benefit, all related consumer
protections in State law shall apply.
``(c) State Banking or Thrift Laws Enacted Pursuant to Federal
Law.--
``(1) In general.--Notwithstanding any other provision of
Federal law and except as provided in paragraph (2), any State
law that--
``(A) is applicable to State savings associations
(as defined in section 3 of the Federal Deposit
Insurance Act); and
``(B) was enacted pursuant to or in accordance
with, and is not inconsistent with, an Act of Congress,
including the Gramm-Leach-Bliley Act, the Consumer
Credit Protection Act, and the Real Estate Settlement
Procedures Act, that explicitly or by implication,
permits States to exceed or supplement the requirements
of any comparable Federal law,
shall apply to any Federal savings association.
``(2) Exceptions.--Paragraph (1) shall not apply with
respect to any State law if--
``(A) the State law discriminates against Federal
savings associations; or
``(B) the State law is inconsistent with provisions
of Federal law other than this Act, but only to the
extent of the inconsistency (as determined in
accordance with the provision of the other Federal
law).
``(d) State Laws Protecting Against Predatory Mortgage Loans.--To
the extent not otherwise addressed in this section, State laws
providing greater protection in high cost mortgage loans, however
denominated, both in coverage and content, than is provided under the
Truth in Lending Act (including the provisions amended by the Home
Ownership and Equity Protection Act of 1994) shall apply to any Federal
savings association.
``(e) Comparable Federal Regulation Required.--In relation to the
regulation of consumer credit and deposit transactions, the Director of
the Office of Thrift Supervision may preempt State law pursuant to this
Act only when there is a comparable Federal statute, or regulations
pursuant to a Federal statute other than this Act, expressly governing
the activity, except in relation to interest pursuant to section 4(g).
``(f) No Negative Implications for Applicability of Other State
Laws.--No provision of this section shall be construed as altering or
affecting the applicability, to Federal savings associations, of any
State law which is not described in this section.
``(g) Effect of Transfer of Transaction.--A transaction that is not
entitled to preemption at the time of the origination of the
transaction does not become entitled to preemption under this Act by
virtue of its subsequent acquisition by a Federal savings association.
``(h) Denial of Preemption not a Deprivation of a Civil Right.--The
preemption of any provision of the law of any State with respect to any
Federal savings association shall not be treated as a right, privilege,
or immunity for purposes of section 1979 of the Revised Statutes of the
United States (42 U.S.C. 1983).
``(i) Definition.--For purposes of this section, the terms
`includes' and `including' have the same meaning as in section 3(t) of
the Federal Deposit Insurance Act.''.
(b) Clerical Amendment.--The table of sections for the Home Owners'
Loan Act (12 U.S.C. 1461 et seq.) is amended by striking the item
relating to section 6 and inserting the following new item:
``6. State law preemption standards for Federal savings associations
and affiliates clarified.''.
SEC. 202. VISITORIAL STANDARDS.
Section 6 of the Home Owners' Loan Act (as added by section 201(a)
of this title) is amended by adding at the end the following new
subsections:
``(j) Visitorial Powers.--No provision of this Act shall be
construed as limiting or restricting the authority of any attorney
general (or other chief law enforcement officer) of any State to bring
any action in any court of appropriate jurisdiction--
``(1) to enforce any applicable Federal or State law, as
authorized by such law; or
``(2) on behalf of residents of such State, to enforce any
applicable provision of any Federal or State law against a
Federal savings association, as authorized by such law, or to
seek relief and recover damages for such residents from any
violation of any such law by any Federal savings association.
``(k) Enforcement Actions.--The ability of the Director of the
Office of Thrift Supervision to bring an enforcement action under this
Act or section 5 of the Federal Trade Commission Act does not preclude
private parties from enforcing rights granted under Federal or State
law in the courts.''.
SEC. 203. CLARIFICATION OF LAW APPLICABLE TO STATE-CHARTERED
NONDEPOSITORY INSTITUTION SUBSIDIARIES.
Section 6 of the Home Owners' Loan Act (as added by section 201(a)
of this title) is amended by inserting after subsection (k) (as added
by section 202) the following new subsection:
``(l) Clarification of Law Applicable to Nondepository Institution
Affiliates of Federal Savings Associations.--
``(1) In general.--No provision of this Act shall be
construed as preempting the applicability of State law to any
State-chartered nondepository institution, subsidiary, other
affiliate, or agent of a Federal savings association.
``(2) Definitions.--For purposes of this section, the
following definitions shall apply:
``(A) Depository institution, subsidiary,
affiliate.--The terms `depository institution',
`subsidiary', and `affiliate' have the same meanings as
in section 3 of the Federal Deposit Insurance Act.
``(B) Nondepository institution.--The term
`nondepository institution' means any entity that is
not a depository institution.''.
SEC. 204. DATA COLLECTION AND REPORTING.
(a) Collecting and Monitoring Consumer Complaints.--
(1) In general.--The Director of the Office of Thrift
Supervision shall record and monitor each complaint received
directly or indirectly from a consumer regarding a Federal
savings association or any subsidiary of a Federal savings
association and record the resolution of the complaint.
(2) Factors to be included.--In carrying out the
requirements of paragraph (1), the Director of the Office of
Thrift Supervision shall include--
(A) the date the consumer complaint was received;
(B) the nature of the complaint;
(C) when and how the complaint was resolved,
including a brief description of the extent, and the
results, of the investigation made by the Director into
the complaint, a brief description of any notices given
and inquiries made to any other Federal or State
officer or agency in the course of the investigation or
resolution of the complaint, a summary of the
enforcement action taken upon completion of the
investigation, and a summary of the results of
subsequent periodic reviews by the Comptroller of the
extent and nature of compliance by the Federal savings
association or subsidiary with the enforcement action;
and
(D) if the complaint involves any alleged violation
of a State law (whether or not Federal law preempts the
application of such State law to such Federal savings
association) by such savings association, a cite to and
a description of the State law that formed the basis of
the complaint.
(b) Report to the Congress.--
(1) Periodic reports required.--The Director of the Office
of Thrift Supervision shall submit a report semi-annually to
the Congress on the consumer protection efforts of the Office
of Thrift Supervision.
(2) Contents of report.--Each report submitted under
paragraph (1) shall include the following:
(A) The total number of consumer complaints
received by the Director during the period covered by
the report with respect to alleged violations of
consumer protection laws by Federal savings
associations and subsidiaries of Federal savings
associations.
(B) The total number of consumer complaints
received during the reporting period that are based on
each of the following:
(i) Each title of the Consumer Credit
Protection Act (reported as a separate
aggregate number for each such title).
(ii) The Truth in Savings Act.
(iii) The Right to Financial Privacy Act of
1978.
(iv) The Expedited Funds Availability Act.
(v) The Community Reinvestment Act of 1977.
(vi) The Bank Protection Act of 1968.
(vii) The Home Owners' Loan Act.
(viii) The Federal Deposit Insurance Act.
(ix) The Real Estate Settlement Procedures
Act of 1974.
(x) The Home Mortgage Disclosure Act of
1975.
(xi) Any other Federal law.
(xii) State consumer protection laws
(reported as a separate aggregate number for
each State and each State consumer protection
law).
(xiii) Any other State law (reported
separately for each State and each State law).
(C) A summary description of the resolution efforts
by the Director for complaints received during the
period covered, including--
(i) the average amount of time to resolve
each complaint;
(ii) the median period of time to resolve
each complaint;
(iii) the average and median time to
resolve complaints in each category of
complaints described in each clause of
subparagraph (B); and
(iv) a summary description of the longest
outstanding complaint during the reporting
period and the reason for the difficulty in
resolving such complaint in a more timely
fashion.
(3) Disclosure of report on ots website.--Each report
submitted to the Congress under this subsection shall be
posted, by the Director of the Office of Thrift Supervision, in
a timely fashion and maintained on the website of the Office of
Thrift Supervision on the World Wide Web.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
Sponsor introductory remarks on measure. (CR E1625)
Referred to the Subcommittee on Financial Institutions and Consumer Credit.
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