By Heller, Michele; Davenport, Todd
American Banker , Vol. 169, No. 2
Federal banking regulators already have so many deadlines looming that 2004 promises to be one of their more hectic years in some time.
The biggest priorities are familiar: credit reporting and preemption rules. But those matters will advance as regulators make tough calls on preemption and get into credit reporting nitty-gritty that Congress dumped in their laps.
The most time-consuming project will be writing 26 regulations implementing the Fair and Accurate Credit Transactions Act, which President Bush signed last month. The Office of the Comptroller of the Currency is expected to finalize its controversial preemption rule soon.
Industry officials are gearing up for an unremitting pace, starting immediately.
"It is going to be a very busy first half of the year," said Charlotte Bahin, the director of regulatory affairs for America's Community Bankers. "That is for sure."
Industry officials fought hard for the FACT Act last year and said they will be watching to make sure that regulators take full advantage of the flexibility Congress gave them to set compliance rules.
"The final assessment of these provisions will have to await the regulations, but there is enough in the law to help mitigate some of the burdens that might otherwise have been imposed," said Karen Thomas, the director of regulatory affairs at the Independent Community Bankers of America.
The sweeping FACT Act sets new obligations for financial firms to help deter identity theft and give consumers more control of their credit data. It also reauthorizes a federal ban on state laws that interfere with corporate credit granting and marketing practices.
Lawmakers put the Fed and the Federal Trade Commission, which is led by Bush appointee Timothy Muris, in charge of writing the regulations. The act requires the agencies to consult with the other federal bank and credit union regulators, however.
Some of the work is as simple as setting an effective date, but about 20 provisions involve formulating detailed rules. Those include implementing new initiatives, such as letting customers block solicitations from affiliates, and notifying them if risk-based pricing results in their getting credit at a higher-than-average rate or if negative information is furnished to a credit bureau.
Last month the Fed and FTC proposed giving businesses until Dec. 1 to comply with the 26 more complicated initiatives.
"This will allow industry and the various agencies a reasonable time to establish systems and rules to implement these sections effectively," the proposal said.
The six provisions clarifying requirements under existing law will go into effect March 31, according to the proposal.
On preemption, most observers expect that as early as this month the OCC will publish a final rule on real estate lending that is not much different from the proposal it made this summer. But the controversy probably will not end there.
Though the agency has been generally successful in defending its preemption power in the courts, at least one state attorney general -- New York's Eliot Spitzer -- has hinted that he could sue to roll back the regulation.
State bank regulators, legislators, and attorneys general reacted angrily to an OCC proposal accompanying the July preemption of the Georgia Fair Lending Act that articulated broad powers over real estate lending of national banks. They criticized it as a blatant power grab.
Community groups complained about the invalidation of state consumer protection laws; members of the House and Senate, accusing the agency of overstepping its bounds, urged a delay in finalizing the proposal.
Comptroller John D. Hawke Jr. has shown no indication that he will back down. On Dec. 23 he wrote Rep. Carolyn Maloney, D-N.Y, in response to criticism from her and others in the state's delegation.
In the letter Mr. …