WASHINGTON (Legal Newsline) - The nation's state attorneys general are claiming the federal Office of the Comptroller of the Currency has been attempting to preempt state consumer protection laws for a decade.
They made the comment in response to new rules drafted by the OCC in May that implement several provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In a letter, the AGs say the rules preempt state laws protecting consumers against national banks.
Illinois Attorney General Lisa Madigan signed the letter.
The AGs claim they are the ones who have been aggressively protecting consumers against abusive financial practices, pointing to multimillion-dollar settlements with First Alliance, Household Finance, Ameriquest and Countrywide.
"At the outset of the subprime lending debacle, many states enacted new restrictions on subprime loan origination and documentation practices," the AGs wrote Monday. "These state-level reforms occurred before any similar action at the federal level, and paved the way for the new mortgage rules in the Dodd-Frank Act.
"More recently, state attorneys general took the initiative in addressing mortgage-servicing failures and are now cooperating with federal authorities to bring needed reforms to loan servicing and foreclosure processing.
"Over the last decade, state attorneys general have vigorously opposed the OCC's aggressive campaign to preempt state consumer protection laws."
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