The OCC explained its interpretation of the Dodd-Frank preemption provisions in a May 12, 2011 letter responding to an inquiry from Senators Mark Carper and Mark Warner, who authored those provisions. Here are the highlights:

  • The “prevents or significantly interferes with the exercise by the national bank of its powers” language from Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance Commissioner, et. al., 517 U.S. 25 (1996) quoted in Dodd Frank is the “touchstone or starting point” in the analysis, but the analysis “may not stop there and must consider the whole of the conflict preemption analysis” in the decision and its progeny.
  • The OCC’s 2004 regulations remain in full force and effect because they codify the Barnett Bank (ID cite) conflict preemption standard. However, the OCC will remove the “obstruct, impair, and condition” standard from those regulations in light of congressional intent to “eliminate uncertainty” created by this “distillation” of the conflict preemption principles in Barnett Bank.
  • The OCC will rescind its regulation concerning application of state laws to national bank operating subsidiaries, amend its regulations to provide that the same preemption standards apply to national banks and federal thrifts, and revise its regulations to comport with the Supreme Court’s ruling in Cuomo v. Clearing House Ass’n, LLC, 129 S. Ct. 2710, 2715, 174 L. Ed. 2d 464 (2009), all of which reflect Dodd- Frank requirements.