Letters to the Hill

ICBA Letter Opposing Edwards Resolutions

April 15, 2004

Dear Senator:

The Independent Community Bankers of America urges you to oppose two Joint Resolutions of Disapproval (S.J. Res. 31 and S.J. Res. 32) introduced by Senator John Edwards. These resolutions would overturn two regulations that recently were issued by the Office of the Comptroller of the Currency ("OCC").

The OCC regulations provide that the National Bank Act, not state law, governs many of the activities of national banks. The proposed resolutions would revoke those regulations in their entirety. And, if they were adopted under the Congressional Review Act ("Review Act") procedures, the OCC could not reissue them in substantially the same form unless specifically authorized by a new law.

ICBA did not support adoption of these regulations when proposed; we recommended instead that the OCC continue its prior practice of preempting state laws on a case-by-case basis. In our view, the importance of the federal-state relationship mandates that each instance should be carefully considered in its own context and on its own merits. The OCC has successfully used this approach since the enactment of the National Bank Act over 140 years ago.

Nevertheless, the proposed resolutions of disapproval and consideration of them under the Review Act are deeply troubling. The Review Act effectively prevents careful consideration of individual preemption issues by the Senate Banking Committee. That Committee and its House counterpart have already begun their oversight on the OCC regulations. Hasty action by Congress could short-circuit their careful work.

Substantively, ICBA has supported and continues to support preemption in many individual cases considered by OCC and the courts. These long-standing agency and court decisions could be called into serious question if Congress passes the resolutions under the Review Act.

Similarly, Congressional enactment of the resolutions could chill additional case-by-case preemption by federal banking agencies. For example, community bankers have expressed increasing concern about the trend among state legislatures to pass aggressive consumer protection measures that, although well-intended, increase banks' regulatory burden and have negative unintended consequences for bank customers. The OCC's case-by-case approach can prevent these difficulties while maintaining state prerogatives.

For each of these reasons, ICBA again urges you to reject the proposed resolutions of disapproval. Instead, we hope you will encourage the Banking Committee to continue its oversight of the OCC and the other banking regulatory agencies.

Thank you for considering our views.

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