{
  "id": "R45081",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R45081",
  "active": true,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 577760,
      "date": "2018-01-23",
      "retrieved": "2018-05-10T11:41:16.607812",
      "title": "Banking Law: An Overview of Federal Preemption in the Dual Banking System",
      "summary": "Banks play a critical role in the United States economy, channeling funds from savers to borrowers and thereby facilitating economic activity. To address the risks of bank failures and excessive risk-taking, and the problem that consumers at times lack the information or expertise to make sound choices concerning financial products and services, both federal and state lawmakers have imposed a host of regulations on commercial banks.\nThe United States has what is referred to as a \u201cdual banking system,\u201d in which banks can choose to apply for a charter from a state banking authority or a federal charter from the Office of the Comptroller of the Currency (OCC), a bureau within the Department of the Treasury. A bank\u2019s choice of chartering authority is also a choice of primary regulator, as state regulatory agencies serve as the primary regulators of state-chartered banks, and the OCC serves as the primary regulator of national banks. Despite receiving their authorities from state law, state banks are subject to many federal laws. Among other federal laws, state banks are subject to certain federal tax, consumer protection, and antidiscrimination laws. Similarly, although they receive their powers from federal law, national banks are not wholly immune from state law. Rather, national banks are often subject to generally applicable state laws concerning contracts, torts, property rights, and debt collection when those laws do not conflict with or frustrate the purpose of federal law. \nNonetheless, federal law preempts state laws that interfere with the powers of national banks. In Barnett Bank of Marion County, N.A. v. Nelson, the Supreme Court held that the National Bank Act of 1864 (NBA) preempts state laws that \u201csignificantly interfere\u201d with a \u201cnational bank\u2019s exercise of its powers\u201d\u2014a standard that lower courts have applied to hold a wide variety of state laws preempted. The Court has also issued two decisions on the preemptive scope of a provision of the NBA limiting \u201cvisitorial powers\u201d over national banks to the OCC, holding that the provision extends to the operating subsidiaries of national banks, but does not bar state judicial law enforcement actions against national banks. Finally, the OCC has taken a broad view of the preemptive effects of the NBA, a view that it has reaffirmed after the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank).\nThis report provides an overview of the respective roles of the federal government and the states in regulating banking. The report begins by providing a general overview of the doctrine of federal preemption, before discussing the American \u201cdual banking system.\u201d It then addresses several key areas where preemption issues have arisen with respect to banking law, including (1) the standard for implied preemption of state laws that interfere with the powers of national banks adopted by the Supreme Court in Barnett Bank; (2) the Court\u2019s decisions in two cases concerning \u201cvisitorial powers\u201d over national banks, Watters v. Wachovia Bank, N.A. and Cuomo v. Clearing House Association, L.L.C.; and (3) interpretive letters and rules concerning federal preemption issued by the OCC. The report also discusses the provisions in Dodd-Frank concerning preemption of state consumer protection laws, and their interpretation by courts and the OCC. Finally, the report concludes by discussing issues that are likely of interest to the 115th Congress concerning preemption, including provisions in the Financial CHOICE Act of 2017 regarding which entities may benefit from NBA preemption of state usury laws.",
      "type": "CRS Report",
      "typeId": "REPORTS",
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      "topics": [
        {
          "source": "IBCList",
          "id": 4862,
          "name": "Federalism"
        },
        {
          "source": "IBCList",
          "id": 4870,
          "name": "Banking"
        }
      ]
    }
  ],
  "topics": [
    "Domestic Social Policy",
    "Economic Policy",
    "Legislative Process"
  ]
}