Statement By Attorney General Eliot Spitzer Regarding Preemption Of State Consumer Protection Laws

"The OCC today issued two regulations designed to protect national banks at the expense of consumers.

One regulation would broadly preempt all state laws against national banks, including predatory lending laws, leaving only narrow exceptions for contracts, debt collection, acquisition and transfer of property, taxation, criminal, zoning and tort laws.

The other regulation would confer upon the OCC exclusive jurisdiction over national banks, and specifically exclude state attorneys general from enforcing consumer protection laws against national banks.

Together, the two regulations would prevent the states from enacting or enforcing almost any law against national banks, including consumer protection laws of general applicability that apply to every other business in the state.

These regulations would also result in an unprecedented expansion of the OCC's powers, while at the same time shielding the banks from state enforcement officials charged with protecting their citizens from fraudulent and illegal conduct.

The OCC regulations are opposed by a bi-partisan coalition of state officials. In fact, all 50 state attorneys general have submitted comments to the OCC opposing this action. The attorneys general have noted that OCC devotes the vast majority of its time and resources to monitoring the safety and soundness of financial institutions, and does not have the states' experience, expertise, resources or record in addressing consumer protection issues.

With this action, the OCC is pursing shamefully bad public policy. The OCC cannot, by administrative fiat, take away protections to which New York consumers have always been entitled, nor can it take away states' powers to enforce long-standing laws.

I will not allow these regulations to deter my office from taking legal action against deceptive or illegal conduct engaged in by national banks in New York. My office will act to protect New York consumers and we will oppose any attempt to restrict us in fulfilling this obligation."