[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>