Bill Haraf, Commissioner of Financial Institutions, was one of the many witnesses who testified last week at the California legislature’s joint informational hearing entitled “The Dodd-Frank Wall Street Reform and Consumer Protection Act: Initial Reactions, Initial Steps and Likely Impacts”. The California Department of Financial Institutions regulates state chartered banks and credit unions (When I served as Commissioner of Corporations, credit unions were regulated by the Department of Corporations).

Commissioner Haraf’s testimony touched upon some of the many impacts of the Dodd-Frank Act on state regulation of financial institutions. On very big change is the roll-back of the Comptroller of the Currency’s power to preempt the application of state laws to national banks, a point echoed by Preston DuFauchard, the Commissioner of Corporations. This certainly portends greater national bank interest in California financial services legislation and regulation. I also expect to see some court battles over preemption.