Senate Democrats Assault the OCC's Preemption Rules
Heller, Michele, American Banker
Regulations exempting national banks from complying with a host of state consumer protection laws and enforcement actions came under fire Wednesday from Senate Democrats.
Sen. John Edwards, D-N.C., introduced a resolution that would overturn preemption rules from the Office of the Comptroller of the Currency that took effect in February The regulations trump state laws governing the lending and deposit-taking operations of national banks and leave the OCC as the sole enforcer of the state laws it did not preempt.
"Congress disapproves the rule ... and such rule shall have no force or effect," Sen. Edwards' resolution says.
Resolutions receive privileged status in the Senate, meaning that they cannot be filibustered. As a result, Sen. Edwards' measure just the support of only 51 senators for final passage, instead of the 60 required for most legislation. (It takes 60 votes to stop a filibuster.)
Sources say a similar effort may be under way in the House. Rep. Barney Frank of Massachusetts, the ranking Democrat on the House Financial Services Committee, has said he would explore taking similar action.
Under congressional rules, the House has until mid-May to act and the Senate has until June.
Sen. Edwards, who recently ended his attempt to capture the Democratic presidential nomination, made his potentially rule-killing move the same day the Senate Banking Committee held its first hearing into the OCC rules.
The agency, represented at the hearing by Comptroller John D. Hawke Jr., got no support from the handful of mostly Democratic members attending the hearing.
The committee's chairman, Sen. Richard Shelby, R-Ala., did not take a position, but the Democrats lashed out against the rules.
"I think the OCC has hurt itself by doing this," said Sen. …