The Consumer Financial Protection Bureau was incorrect in determining that the Truth in Lending Act does not preempt a recently enacted New York State disclosure law, ICBA said in a new comment letter.

Background: The New York law applies TILA-like disclosures to commercial loans, but its annual percentage rate calculation differs from TILA’s. The CFPB preliminarily determined that TILA does not preempt the New York law because TILA governs consumer credit while the state law governs commercial credit.

ICBA Position: In its comment letter, ICBA said:

  • Precedence dictates that a different definition of a term used in TILA creates a contradictory construct that requires preemption.

  • This contradiction is significant—even if one law governs commercial credit and the other consumer credit—because APR is a widely used and understood term and imposing two APR requirements would be a public disservice.

ICBA Recommendation: ICBA concluded by recommending that the CFPB narrowly preempt the New York law and ask the state to use different terminology that does not conflict with TILA.