Enforcement/Statutory Preemption (§ 1044)

The longstanding preemption policy debate concerns the complex layering of federal and state consumer financial laws that has made nationwide compliance challenging for many companies. While the trend in recent years has favored more federal preemption and hence greater uniformity, the legislation reverses that trend by affording states greater legislative and enforcement latitude. For example, Congress has authorized states to enact stricter substantive protections and allows state attorneys general to initiate civil actions, including against banks, to enforce the federal consumer financial protection laws. With respect to national banks, the OCC may on a case-by-case basis preempt a state law only if that law “prevents or significantly interferes” with the bank’s ability to do business and if federal consumer protection laws address the issue.