I 108th CONGRESS 2d Session H. R. 5251 IN THE HOUSE OF REPRESENTATIVES October 7, 2004 Mr. Frank of Massachusetts (for himself, Mr. Gutierrez, Mr. Sherman, Ms. Waters, Mr. Sanders, Ms. Watson, Mr. Clay, Mrs. McCarthy of New York, Ms. Carson of Indiana, Mr. Hinchey, Mr. Paul, Mr. Rangel, Mr. Acevedo-Vilá, Mr. Brady of Pennsylvania, Mr. Serrano, Mr. Delahunt, Mr. Dingell, Ms. Lee, Mr. Weiner, Mr. Ackerman, Ms. Slaughter, Ms. Schakowsky, Mr. Waxman, and Mrs. Maloney) 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 for other purposes.

1.

Short Title

This Act may be cited as the Preservation of Federalism in Banking Act.

2.

State Law Preemption Standards for National Banks Clarified

(a)

In General

Chapter 1 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:

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 State consumer law of general application (including any law relating to unfair or deceptive acts or practices and any consumer fraud law) 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 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 consistent with, an Act of Congress, including the Gramm-Leach-Bliley Act and the Consumer Credit Protection Act, that 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)the State law is inconsistent with other provisions of Federal law, but only to the extent of the inconsistency (as determined in accordance with the other provision of Federal law). (c)

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 subsection (a) or (b).

. (b)

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). (c)

Clerical Amendment

The table of sections for chapter 1 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.

3.

Visitorial Standards

Section 5136C of the Revised Statutes of the United States (as added by section 2(a) of this Act) is amended by adding at the end the following new subsection: (d)

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..

4.

Clarification of law applicable to State-chartered nondepository institution subsidiaries

Section 5136C of the Revised Statutes of the United States (as added by section 2(a) of this Act) is amended by inserting after subsection (d) (as added by section 3) the following new subsection: (e)

Clarification of law applicable to nondepository institution subsidiaries of national banks

(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 of a national bank, except to the extent the preemption is explicitly provided by an Act of Congress. (2)

Definitions

For purposes of this section, the following definitions shall apply: (A)

Depository institution, subsidiary

The terms depository institution and subsidiary 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..

5.

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 such 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.