At The Clearing House Annual Conference, Comptroller of the Currency Jonathan Gould outlined an agency-wide strategy to defend and promote federal preemption across the banking system. As reported by Law360, he emphasized pairing court advocacy with public- and policymaker-facing engagement to rebuild political support that he said has eroded over the past 15 years.
Federal preemption is the legal doctrine under which federal laws displace or override state laws. Most notably, the National Bank Act preempts many state laws for national banks. Gould stressed that preemption benefits are not limited to national banks. They also extend to state-chartered banks and other federally regulated institutions through interest-rate exportation and parity laws, such as the Federal Deposit Insurance Act (FDIA). He previewed several prongs of the OCC’s approach: continuing to file amicus briefs in key cases, consulting with Treasury, exploring updated preemption regulations for the first time since post-crisis reforms, and stepping up outreach to Congress and state regulators. He urged other agencies and banks of all sizes to speak up in support of preemption, noting that durable legal parameters flow from sustained political legitimacy. He acknowledged post-crisis reforms that narrowed national bank preemption and ongoing debate in the courts, including recent decisions that some view as trending toward a tighter preemption standard.
Why this matters
- Regulatory clarity: Renewed agency guidance and amicus activity could shape how courts apply preemption to state laws touching payments, fees, escrow interest, and product terms.
- National operating models: Stronger, clearer preemption can reduce fragmentation for multi-state product offerings and compliance programs.
- Stakeholder engagement: Expect closer coordination among federal regulators and more dialogue with state counterparts and Congress.
What to watch
- Whether the OCC proposes new preemption regulations, specifically:
- How they frame the “significant interference” analysis in practice; and
- Whether they clarify the “valid when made” doctrine overcomes “true lender” claims.
- The agency’s next wave of amicus briefs and the types of state-law challenges it prioritizes.
- Signals from other federal banking agencies and industry coalitions echoing the OCC’s message.
- Any action from Congress on amending the FDIA to shore up its preemptive force as currently supported by case law and regulations.
