The Dodd-Frank Act's Expansion of State Authority to Protect Consumers of Financial Services

By Wilmarth, Arthur E., Jr. | Journal of Corporation Law, Summer 2011 | Go to article overview

The Dodd-Frank Act's Expansion of State Authority to Protect Consumers of Financial Services


Wilmarth, Arthur E., Jr., Journal of Corporation Law


  I. INTRODUCTION
 II. FEDERAL BANKING AGENCIES FAILED TO PROTECT CONSUMERS DURING THE
     HOUSING BOOM AND PREVENTED THE STATES FROM DOING SO
     A. The FRB Failed to Exercise Its Authority under HOEPA to Stop
        Predatory Lending
     B. The FRB Failed to Regulate Nonprime Lenders That Were
        Subsidiaries of Bank Holding Companies
     C. Federal Banking Agencies Issued Weak and Inadequate Guidance
        on nonprime Mortgages
     D. Federal Regulators Failed to Stop Predatory Lending Because of
        Their Belief in Deregulation and "Pushback" from the Financial
        Services Industry
        1. The FRB, the OTS and the OCC Followed Deregulatory Policies
           During the Nonprime Lending Boom
        2. The Financial Services Industry Strongly Resisted Efforts
           by Federal Regulators to Restrict Nonprime Mortgage Lending
     E. The OTS and the OCC Preempted Initiatives by the States to
        Stop Predatory Lending, Thereby Aggravating the Severity of
        the Financial Crisis
        1. Many States Adopted Laws and Brought Enforcement Actions to
           Stop Predatory Lending
        2. The OTS and the OCC Preempted State APL Laws and State
           Enforcement Efforts
        3. The Industry-Based Funding for the OTS and OCC Created a
           Conflict of Interest Between Their Supervisory Duties and
           Their Budgetary Concerns
        4. OTS and OCC Preemption Helped Federal Thrifts and National
           Banks to Establish Leading Positions as Subprime and Alt-A
           Mortgage Lenders
        5. The OTS, the OCC, and the FRB Failed to Prevent the
           Failures of Several Major Financial Institutions That Were
           Heavily Engaged in Originating and Securitizing Nonprime
           Mortgages
III. TITLE X OF DODD-FRANK GRANTS SUPPLEMENTAL LAWMAKING AND LAW
     ENFORCEMENT POWERS TO THE STATES AND IMPOSES SIGNIFICANT
     RESTRICTIONS ON THE OCC'S AUTHORITY TO PREEMPT STATE LAWS

     A. Title X Establishes a Federal "Floor" of Protection for
        Consumers of Financial Services
     B. Title X Empowers the States to Adopt Laws Providing Additional
        Protection to Consumers of Financial Services
     C. Title X Enables State Attorneys General to Enforce the CFP Act
        and the CFPB's Regulations
     D. Dodd-Frank Limits the Preemptive Authority of the OCC with
        Respect to National Banks and Federal Thrifts
        1. Dodd-Frank Establishes New Preemption Standards That Govern
           the Application of State Consumer Financial Laws to
           National Banks and Federal Thrifts
        2. Dodd-Frank's New Standards Significantly Limit the OCC's
           Authority to Preempt State Consumer Financial Laws
           a. Under Dodd-Frank, the OCC May Preempt a State Consumer
              Financial Law Only If That Law Prevents or Significantly
              Interferes With a National Bank's Exercise of Its Powers
           b. Dodd-Frank Requires the OCC to Act on a Case-by-Case
              Basis, to Show Substantial Evidence for Its Preemptive
              Determinations, and to Publish and Review Its
              Determinations Periodically
           c. Dodd-Frank Confirms that the NBA Is Governed by Conflict
              Preemption Rules, and that OCC Preemption Determinations
              Are Not Entitled to Chevron Deference
           d. Dodd-Frank Denies Preemptive Immunity to Most
              Subsidiaries, Affiliates and Agents of National Banks
        3. Dodd-Frank Requires the OCC to Rescind or Modify Its
           Existing Preemption Rules Except for the Regulation
           Governing the Charging of "Interest" under 12 U.S.C.
           [section] 85
           a. The OCC's Preemption Test Conflicts with the Barnett
              Bank Preemption Standard Incorporated by Dodd-Frank
           b. The OCC's Blanket Preemption Rules Are No Longer Valid
              in View of Dodd-Frank's Mandate for "Case-by-Case"
              Determinations Supported by "Substantial Evidence"
           c. … 

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Dodd-Frank Act's Expansion of State Authority to Protect Consumers of Financial Services
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.