Office of Thrift Supervision Integration; Dodd-Frank Act Implementation, 30557-30573 [2011-12859]

Agencies

• Office of the Comptroller of the Currency
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 76, Number 102 (Thursday, May 26, 2011)]
[Proposed Rules]
[Pages 30557-30573]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-12859]



[[Page 30557]]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 4, 5, 7, 8, 28, and 34

[Docket ID OCC-2011-0006]
RIN 1557-AD41


Office of Thrift Supervision Integration; Dodd-Frank Act 
Implementation

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Office of the Comptroller of the Currency (OCC) is 
proposing to amend its regulations governing organization and 
functions, availability and release of information, and post-employment 
restrictions for senior examiners; and assessment of fees to 
incorporate the transfer of certain functions of the Office of Thrift 
Supervision (OTS) to the OCC pursuant to Title III of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act. The OCC also is 
proposing amendments to its rules pertaining to change in control of 
credit card banks and trust banks to implement section 603 of the Act; 
deposit-taking by uninsured Federal branches to implement section 335 
of the Act; and its preemption and visitorial powers rules, subpart D, 
to implement various sections of the Act.

DATES: Comments must be received on or before June 27, 2011.

ADDRESSES: Because paper mail in the Washington, DC area and at the OCC 
is subject to delay, commenters are encouraged to submit comments by 
the Federal eRulemaking Portal or e-mail, if possible. Please use the 
title ``OTS Integration; Dodd-Frank Act Implementation'' to facilitate 
the organization and distribution of the comments. You may submit 
comments by any of the following methods:
     Federal eRulemaking Portal--``regulations.gov'': Go to 
https://www.regulations.gov. Select ``Document Type'' of ``Proposed 
Rules,'' and in ``Enter Keyword or ID Box,'' enter Docket ID ``OCC-
2011-0006'' and click ``Search.'' On ``View By Relevance'' tab at 
bottom of screen, in the ``Agency'' column, locate the Notice of 
Proposed Rulemakings for OCC, in the ``Action'' column, click on 
``Submit a Comment'' or ``Open Docket Folder'' to submit or view public 
comments and to view supporting and related materials for this 
rulemaking action.
     Click on the ``Help'' tab on the Regulations.gov home page 
to get information on using Regulations.gov, including instructions for 
submitting or viewing public comments, viewing other supporting and 
related materials, and viewing the docket after the close of the 
comment period.
     E-mail: regs.comments@occ.gov.
     Mail: Office of the Comptroller of the Currency, 250 E 
Street, SW., Mail Stop 2-3, Washington, DC 20219.
     Fax: (202) 874-5274.
     Hand Delivery/Courier: 250 E Street, SW., Mail Stop 2-3, 
Washington, DC 20219.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket ID OCC-2011-0006'' in your comment. In general, OCC will enter 
all comments received into the docket and publish them on the 
Regulations.gov Web site without change, including any business or 
personal information that you provide such as name and address 
information, e-mail addresses, or phone numbers. Comments received, 
including attachments and other supporting materials, are part of the 
public record and subject to public disclosure. Do not enclose any 
information in your comment or supporting materials that you consider 
confidential or inappropriate for public disclosure.
    You may review comments and other related materials that pertain to 
this notice of proposed rulemaking by any of the following methods:
     Viewing Comments Electronically: Go to https://www.regulations.gov. Select ``Document Type'' of ``Public 
Submissions,'' in ``Enter Keyword or ID Box,'' enter Docket ID ``OCC-
2011-0006,'' and click ``Search.'' Comments will be listed under ``View 
By Relevance'' tab at bottom of screen.
     Viewing Comments Personally: You may personally inspect 
and photocopy comments at the OCC, 250 E Street, SW., Washington, DC. 
For security reasons, the OCC requires that visitors make an 
appointment to inspect comments. You may do so by calling (202) 874-
4700. Upon arrival, visitors will be required to present valid 
government-issued photo identification and to submit to security 
screening in order to inspect and photocopy comments.
     Docket: You may also view or request available background 
documents and project summaries using the methods described above.

FOR FURTHER INFORMATION CONTACT: Andra Shuster, Special Counsel, Heidi 
Thomas, Special Counsel, or Stuart Feldstein, Director, Legislative and 
Regulatory Activities Division, (202) 874-5090; Timothy Ward, Deputy 
Comptroller for Thrift Supervision, (202) 874-4468; or Frank Vance, 
Manager, Disclosure Services and Administrative Operations, 
Communications Division, (202) 874-5378, Office of the Comptroller of 
the Currency, 250 E Street, SW., Washington, DC 20219.

SUPPLEMENTARY INFORMATION:

I. Background

    On July 21, 2010, President Barack Obama signed into law the Dodd-
Frank Wall Street Reform and Consumer Protection Act, Public Law 111-
203, 124 Stat. 1376 (2010) (Dodd-Frank Act or Act). As part of the 
comprehensive package of financial regulatory reform measures enacted, 
Title III of the Dodd-Frank Act transfers the powers, authorities, 
rights and duties of the Office of Thrift Supervision to other banking 
agencies, including the OCC, on the ``transfer date.'' The transfer 
date is one year after the date of enactment of the Dodd-Frank Act, 
July 21, 2011 (unless extended in accordance with the provisions of the 
legislation). The Dodd-Frank Act also abolishes the OTS ninety days 
after the transfer date.
    Title III of the Dodd-Frank Act transfers to the OCC all functions 
of the OTS and the Director of the OTS relating to Federal savings 
associations. As a result, the OCC will assume responsibility for the 
ongoing examination, supervision, and regulation of Federal savings 
associations.\1\ The Act also transfers to the OCC rulemaking authority 
of the OTS relating to all savings associations, both state and 
Federal.\2\ The legislation continues in effect all OTS orders, 
resolutions, determinations, agreements, regulations, interpretive 
rules, other interpretations, guidelines, procedures and other advisory 
materials in effect the day before the transfer date, and allows the 
OCC to enforce these issuances with respect to Federal savings 
associations, unless the OCC modifies, terminates, or sets aside such 
guidance or until superseded by the OCC, a court, or operation of 
law.\3\ Title III also transfers OTS employees to either the OCC or 
FDIC, allocated as necessary to perform or support the OTS

[[Page 30558]]

functions transferred to the OCC and FDIC, respectively.\4\
---------------------------------------------------------------------------

    \1\ Title III transfers all functions of the OTS relating to 
state savings associations to the Federal Deposit Insurance 
Corporation (FDIC) and all functions relating to the supervision of 
any savings and loan holding company and nondepository institution 
subsidiaries of such holding companies, as well as rulemaking 
authority for savings and loan holding companies, to the Board of 
Governors of the Federal Reserve System (FRB). Dodd-Frank Act, 
section 312(b)(1) and (2)(A) (savings and loan holding companies) 
and (2)(C) (state savings associations).
    \2\ Dodd-Frank Act, section 312(b)(2)(B)(i).
    \3\ Dodd-Frank Act, section 316(b).
    \4\ Dodd-Frank Act, section 322(a). Pursuant to section 322(a), 
the Director of the OTS, the Comptroller of the Currency, and the 
FDIC Chairman will jointly determine the number of OTS employees 
necessary to perform and support the functions transferred to each 
agency. Because most of the OTS's functions, i.e., those relating to 
supervising Federal savings associations and all of the OTS's 
rulemaking authority for Federal and state savings associations, 
will transfer to the OCC on the transfer date, most of the OTS's 
approximately 1,000 employees will transfer to the OCC.
---------------------------------------------------------------------------

II. OCC Regulatory Actions To Integrate OTS Functions

    As part of its preparation for integrating the functions of the OTS 
into the OCC, the OCC is reviewing its regulations, as well as those of 
the OTS, to determine what changes are needed to facilitate a smooth 
regulatory transition. We expect this review to be accomplished in 
several phases. First, the proposed rule that the OCC is issuing today 
includes provisions revising OCC rules that will be central to internal 
agency functions and operations immediately upon the transfer of 
supervisory jurisdiction for Federal saving associations. Such 
revisions include, for example, providing for the OCC's assessment of 
Federal savings associations and adapting the OCC's rules governing the 
availability and release of information to cover information pertaining 
to the supervision of those institutions. These changes are essential 
to facilitate a seamless transition when the OCC assumes responsibility 
for supervising Federal savings associations on the transfer date.
    Also included in this proposal are changes to the OCC's regulations 
necessary to implement certain revisions to the banking laws that took 
effect on the enactment of the Dodd-Frank Act. These changes include 
revisions to the OCC's change in control rules to implement the 
moratorium on certain changes in control affected by section 603 of the 
Dodd-Frank Act and revisions to our Federal branch and agency rules to 
reflect the permanent increase in deposit insurance provided by section 
335. We plan to publish a final rule resulting from this proposal that 
would be effective on or shortly after the transfer date.
    As part of this first phase of its review of OTS and OCC 
regulations, the OCC also plans to issue an interim final rule with a 
request for comments, effective on the transfer date, that republishes 
those OTS regulations the OCC has the authority to promulgate and will 
enforce as of the transfer date.\5\ These regulations will be moved 
into chapter I of title 12 of the Code of Federal Regulations and 
renumbered accordingly as OCC rules, with nomenclature and other 
technical amendments to reflect OCC supervision. OTS regulations that 
will be unnecessary following the transfer of OTS functions to the OCC, 
or that are superseded as of the transfer date by provisions of the 
Dodd-Frank Act, will be repealed at a later date.
---------------------------------------------------------------------------

    \5\ Section 316(c)(2) of the Dodd-Frank Act requires the OCC 
(along with the FDIC and FRB) to identify those OTS regulations that 
are continued under the Act that each agency will enforce. The OCC 
and FDIC must consult with each other in identifying these 
regulations, and the OCC, FRB, and FDIC must publish a list of these 
identified regulations in the Federal Register not later than the 
transfer date. The OCC is in the process of identifying these OTS 
rules and will publish a notice in the Federal Register in the near 
future.
---------------------------------------------------------------------------

    In future phases of our regulatory review, which will occur 
subsequent to the transfer date, the OCC will consider more 
comprehensive substantive amendments, as necessary, to OTS regulations. 
For example, we may propose to repeal or combine provisions in cases 
where OCC and OTS rules are substantively identical or substantially 
overlap. In addition, we may propose to repeal or modify OCC or OTS 
rules where differences in regulatory approach are not required by 
statute or warranted by features unique to either charter. We expect to 
publish these amendments in one or more notices of proposed rulemaking, 
the first of which would be issued later in 2011.

III. Description of the Proposal

    To incorporate the regulation and supervision of Federal savings 
associations, the OCC is proposing to amend the OCC's rules at 12 CFR 
part 4 pertaining to its organization and functions, the availability 
of information from the OCC under the Freedom of Information Act 
(FOIA), the release of non-public OCC information, and restrictions on 
the post-employment activities of senior examiners; and at 12 CFR part 
8, pertaining to assessments. The OCC also is proposing in this 
rulemaking amendments to 12 CFR parts 5 and 28 to implement sections 
603 and 335 of the Dodd-Frank Act, respectively; and 12 CFR parts 5, 7 
and 34, pertaining to preemption and visitorial powers.
    Set forth below, in numerical order of the parts of our regulations 
to be amended, is a detailed description of the proposed changes.

1. Part 4

a. Part 4, Subpart A--Organization and Functions
    Subpart A of 12 CFR part 4 describes the organization and functions 
of the OCC and provides the OCC's principal addresses. In light of the 
transfer of the powers and duties of the OTS and the OTS Director to 
the OCC and the Comptroller on the transfer date, the OCC proposes to 
amend subpart A to reflect the organizational and functional changes 
resulting from this transfer. Other changes conform this subpart to 
additional provisions of the Dodd-Frank Act.
    Office of the Comptroller of the Currency (Sec.  4.2). Section 4.2 
states that the OCC supervises and regulates national banks and Federal 
branches and agencies of foreign banks. It lists ways in which this 
supervision and regulation is carried out, such as by examining these 
institutions, considering applications for changes in corporate or 
banking structure, and issuing rules pertaining to these institutions.
    Section 312(b)(2)(B) of the Dodd-Frank Act transfers from the OTS 
to the OCC supervisory and regulatory authority over Federal savings 
associations, as well as rulemaking authority for all savings 
associations. Furthermore, section 314 of the Act updates the OCC's 
mission statement set forth at 12 U.S.C. 1 to reflect the OCC's current 
functions. It specifically provides that the OCC is charged with 
assuring the safety and soundness of, and compliance with laws and 
regulations, fair access to financial services, and fair treatment of 
customers by, the institutions and other persons subject to its 
jurisdiction.
    We are proposing to amend Sec.  4.2 to reflect these changes. 
Specifically, we have revised this section to incorporate this mission 
statement; to include Federal savings associations in the list of 
entities that the OCC examines, supervises, and regulates to carry out 
this mission; to provide that the OCC has rulemaking authority for 
state savings associations; and otherwise to streamline the section.
    Comptroller of the Currency (Sec.  4.3). Section 4.3 states that 
the Comptroller of the Currency, as the head of the OCC, is responsible 
for all OCC programs and functions. It also lists certain interagency 
boards and organizations on which the Comptroller, pursuant to statute, 
serves as a member. Section 111(a) of the Dodd-Frank Act establishes 
the Financial Stability Oversight Council (FSOC), with the stated 
purposes of identifying risks to U.S.

[[Page 30559]]

financial stability, promoting market discipline, and responding to 
emerging threats to the financial system's stability.\6\ Section 
111(b)(1)(C) of the Dodd-Frank Act makes the Comptroller of the 
Currency a voting member of the FSOC. The proposed rule amends Sec.  
4.3 by adding the FSOC to the list of organizations on which the 
Comptroller serves as a member.
---------------------------------------------------------------------------

    \6\ Dodd-Frank Act, section 112(a)(1).
---------------------------------------------------------------------------

    Washington office and Web site (Sec.  4.4). Section 4.4 describes 
the role of the OCC's Washington, DC main office and headquarters. It 
states that the Washington office directs OCC policy and operations and 
is responsible for the direct supervision of certain national banks, 
including the largest national banks through its Large Bank Supervision 
Department, as well as other national banks requiring special 
supervision. Pursuant to the Dodd-Frank Act's integration of the OTS 
into the OCC, the proposal makes a conforming change to Sec.  4.4 to 
state that the OCC's Washington headquarters also will have direct 
supervision over certain Federal savings associations, including the 
largest Federal savings associations and those that require special 
supervision, and that large Federal savings associations will be 
overseen by the OCC's Large Bank Supervision Department. In addition, 
we have updated this section to provide that the Washington office also 
is responsible for the supervision of Federal branches and agencies of 
foreign banks and have added a reference to the OCC's Web site.
    District and field offices (Sec.  4.5). Section 4.5 explains the 
role of the OCC's district and field offices. Paragraph (a) states that 
each district office supervises the national banks and Federal branches 
and agencies of foreign banks in its district, except for those 
national banks supervised by the Washington, DC office, and includes a 
chart that provides each district office's address and its geographical 
composition. Paragraph (b) states that OCC's field offices and duty 
stations support the district offices' bank supervisory 
responsibilities.
    Pursuant to the integration of the OTS into the OCC under the Dodd-
Frank Act, the proposal amends Sec.  4.5 to provide that each OCC 
district office also will have responsibility for certain Federal 
savings associations located in its district and that the OCC's field 
offices and duty stations also will support the district offices' 
savings association supervisory responsibilities. We also have updated 
this section to remove the reference to Federal branches and agencies 
of foreign banks, which now are supervised by Large Bank Supervision, 
instead of to the District Offices. Finally, we propose a technical 
amendment to Sec.  4.5 to reflect that the OCC has four district 
offices.
    These changes, along with those in Sec.  4.4, will provide guidance 
on which OCC office will have primary responsibility for the 
supervision of each newly integrated Federal savings association. The 
OTS rule setting forth OTS organization and functions, 12 CFR part 500, 
will be repealed at a later date.
    Frequency of examination of national banks (Sec.  4.6). Section 4.6 
sets forth the statutory authority pursuant to which the OCC conducts 
examinations of national banks and the frequency of these examinations. 
The current, nearly identical OTS rule, 12 CFR 563.171, contains the 
same examination provisions with respect to savings associations.\7\ 
Specifically, each of these rules provides that the OCC or OTS are 
required to conduct a full scope, on-site examination of every 
regulated entity (national bank or savings association, respectively) 
at least once during each 12-month period. Each rule also provides that 
the OCC or OTS may examine certain small national banks or savings 
associations every 18 months, rather than every 12 months, and sets 
forth the conditions that must be satisfied for this 18-month rule to 
apply. Finally, each rule provides that the OCC and OTS may examine a 
national bank or savings association more frequently, as each agency 
deems necessary.
---------------------------------------------------------------------------

    \7\ See 12 U.S.C. 1820(d).
---------------------------------------------------------------------------

    Pursuant to the transfer of the OTS's supervisory authority over 
Federal savings associations to the OCC, we are proposing to integrate 
Sec.  563.171 into Sec.  4.6 so that the OCC rule applies to both 
national banks and Federal savings associations. We also propose to 
amend this section by updating the OCC's statutory authority to conduct 
examinations to include the relevant statutory cite for the OCC's new 
authority to examine savings associations, 12 U.S.C. 1463(a)(1), as 
amended by the Dodd-Frank Act. As a result of this amendment to Sec.  
4.6, Federal savings associations will be subject to the same frequency 
of examinations as prior to the transfer of authority from the OTS to 
the OCC. Section 563.171 will be repealed at a later date.
b. Part 4, Subpart B--Freedom of Information Act
    Subpart B contains the OCC's rules for making requests for agency 
records and documents under the FOIA, 5 U.S.C. 552. The proposed rule 
applies these rules to FOIA requests relating to Federal savings 
associations received by the OCC as of the transfer date, ensures that 
records of the OTS are subject to the OCC's FOIA regulations, and makes 
various technical changes to part 4 to correct technical errors and to 
update appropriate references to OCC units charged with handling FOIA 
requests.
    Purpose and scope (Sec.  4.11). This section provides the purpose 
and scope of the OCC's FOIA rule, which is used to facilitate the OCC's 
interaction with the banking industry and the public. The proposal 
amends this section to include the Federal savings association industry 
within this rule's scope. We also have amended this section to provide 
that this subpart does not apply to FOIA requests filed with the OTS 
before July 21, 2011. Instead, these requests are subject to the rules 
of the OTS in effect on July 20, 2011. This will ensure continuity of 
processing for pending requests at the OTS.
    Information available under the FOIA (Sec.  4.12). This section 
provides that OCC records are available to the public except those 
listed as exempt. We have added a provision to the list of exempt 
records to account for OTS information in the possession of the OCC.
    Public inspection and copying (Sec.  4.14). Section 4.14 lists the 
type of information the OCC makes readily available for public 
inspection and copying. The proposal amends this section by adding 
cross-references to the appropriate Federal savings association-related 
rules for public securities-related filings and the public file of 
pending applications. In addition, the proposal adds to this list any 
similar OTS information, to the extent this information is in the 
possession of the OCC. Finally, the proposal updates an obsolete 
reference in Sec.  4.14(c) to the Multinational Banking Department to 
provide that the public files of pending applications of banks, as well 
as Federal savings associations, supervised by Large Bank Supervision 
are available from the Large Bank Licensing Expert.
    How to request records (Sec.  4.15). Section 4.15 describes the 
process by which a person may request records from the OCC through the 
FOIA. Paragraph (c)(2) currently states that the OCC's Director of 
Communications or that person's delegate initially determines whether 
to grant a request for OCC records. The proposal amends this statement 
to indicate that the Comptroller or the Comptroller's designee makes 
this initial determination, which more accurately reflects the current 
process at the OCC. We have also proposed a change to paragraph (b), 
adding a reference to the

[[Page 30560]]

OCC's Web portal as a means to submit or appeal a FOIA request.
    Predisclosure notice for confidential commercial information (Sec.  
4.16). This section describes the circumstances under which the OCC 
provides a submitter of confidential commercial information with prompt 
written notice of the receipt of a request for this information or of 
an appeal of a denial of a request for such information. The proposal 
amends this section to cover information submitted to the OTS or to the 
Federal Home Loan Bank Board, its predecessor agency, now in the 
possession of the OCC.
    How to track a FOIA request (Sec.  4.18). Section 4.18 provides 
that the OCC will issue a tracking number to all FOIA requesters within 
5 days of the receipt of the request and describes how a FOIA requester 
may track the progress of their FOIA request at the OCC. The proposal 
amends this section to more accurately reflect the OCC's current 
process of automatically issuing tracking numbers to FOIA requesters 
who file via the OCC's Freedom of Information Request Portal, https://appsec.occ.gov/publicaccesslink/palMain.aspx.
c. Part 4, Subpart C--Non-Public Information
    Subpart C contains OCC rules and procedures for requesting access 
to various types of non-public information and the OCC's process for 
reviewing and responding to such requests. It also clarifies the 
persons and entities with which the OCC can share non-public 
information. The OTS has similar rules at 12 CFR 510.5. This proposal 
amends subpart C to include information related to Federal savings 
associations and to ensure that such information remains accessible, 
subject to appropriate procedures and safeguards. The amendments to 
subpart C also ensure that non-public information in the possession of 
former employees or officials of the OTS will remain subject to 
confidentiality safeguards and procedures for requesting access to such 
information.
    Purpose and scope (Sec.  4.31). This section outlines the purposes 
and scope of the OCC's rule for requesting access to various types of 
non-public information. The proposal amends this section to make 
reference to Federal savings associations and state savings association 
regulatory agencies, where appropriate. We also have amended this 
section to provide that this subpart does not apply to requests for 
non-public information filed with the OTS before July 21, 2011. 
Instead, these requests are subject to the rules of the OTS in effect 
on July 20, 2011. This will ensure continuity of processing for pending 
requests at the OTS.
    Definitions (Sec.  4.32). Among other terms, this section defines 
``non-public OCC information'' as information that the OCC is not 
required to release under the FOIA or that the OCC has not yet 
published or made available pursuant to 12 U.S.C. 1818(u). It further 
provides that such information includes records created or obtained by 
the OCC in connection with the OCC's performance of its 
responsibilities, and sets forth examples of these records. The 
proposal amends this section to include OTS non-public information in 
the definition of ``non-public information.'' The proposal also amends 
the list of examples to include Federal savings association-related 
records. This would include OTS records in the possession of the OCC as 
of the transfer date as well as testimony from or an interview with, 
former OTS employees, officers, or agents concerning information 
acquired by that person in the course of his or her performance of 
official duties with the OTS or due to that person's official status 
with the OTS. Finally, the proposal makes technical amendments to this 
definition for clarification purposes and to remove duplicative 
information.
    Section 4.32 also includes a definition of ``supervised entity.'' 
The proposal amends this definition to include Federal savings 
association and Federal savings association subsidiaries.
    Consideration of requests (Sec.  4.35). This section outlines the 
OCC's decision-making process for the release of non-public 
information, the standards for a denial of a request, and time periods 
for OCC consideration of the request. Paragraph (a)(5) of this section 
provides that the OCC generally notifies a national bank if it is the 
subject of a request for information, unless the OCC, in its 
discretion, determines that to do so would advantage or prejudice any 
of the parties in the matter at issue. The proposal amends this 
paragraph to include Federal savings associations.
    Persons and entities with access to OCC information; prohibition on 
dissemination (Sec.  4.37). Paragraph (a) of Sec.  4.37 prohibits, 
except as authorized by this subpart or otherwise by the OCC, a current 
or former OCC employee or agent from disclosing or permitting the 
disclosure of any non-public OCC information to anyone other than an 
employee or agent of the Comptroller for use in the performance of OCC 
duties. This section also requires any current or former OCC employee 
or agent subpoenaed or otherwise requested to provide non-public 
information to immediately notify the OCC of such request, and outlines 
the duties of such employee or agent when subject to such a request. 
The proposal amends this section to cover former OTS employees. As a 
result, former OTS employees must comply with this section with respect 
to OTS information that is in the possession of the OCC and covered by 
this section after the transfer date.
    Subsection (b) of this section prohibits any person, national bank, 
or other entity, including one in lawful possession of non-public OCC 
information, from disclosing such information except when the requester 
has sought the information from the OCC pursuant to this section and as 
ordered by a Federal court in a judicial proceeding in which the OCC 
has had the opportunity to appear and oppose discovery. This subsection 
also provides that a person, bank or other entity may disclose non-
public OCC information to a person or organization officially connected 
with the bank as officer, director, employee, attorney, auditor, or 
independent auditor, or to a consultant with a specified agreement with 
the person, bank, or entity. Finally, this subsection outlines the 
duties of such person, bank or entity when subject to a request for 
non-public OCC information. The proposal amends paragraph (b) to 
include Federal savings associations.
    Paragraph (c) provides that, when not prohibited by law, the 
Comptroller may make non-public information available to the Federal 
Reserve Board and FDIC, and in the Comptroller's sole discretion, to 
certain other government agencies of the United States and foreign 
governments, state agencies with authority to investigate violations of 
criminal law, and state bank regulatory agencies. The proposal amends 
this section to permit the Comptroller to also disclose this 
information to state savings association regulatory agencies.
    Notification of parties and procedures for sharing and using OCC 
records in litigation (Sec.  4.39). This section requires persons 
requesting that the OCC permit the testimony of an OCC employee or 
former OCC employee to notify all other parties to the case that a 
request has been submitted. The proposal applies this section to 
requests for the testimony of former OTS employees.
    Appendix A to Subpart C of Part 4--Model Stipulation for Protective 
Order and Model Protective Order. Appendix A to subpart C sets forth a 
model stipulation for protective order and a model protective order for 
the release of non-public OCC information. The proposal amends these 
models to include statutory citations relating to the Comptroller's 
authority to deem

[[Page 30561]]

Federal savings association-related information confidential. 
Specifically, the proposal adds citations to 12 U.S.C. 1463(a)(1), 
1464(a)(1) and 1464(d)(1)(B)(i), and 5 U.S.C. 301.
d. Part 4, Subpart E--One-Year Restrictions on Post-Employment 
Activities of Senior Examiners
    Twelve CFR part 4, subpart E sets forth the statutorily required 
post-employment restrictions placed on senior examiners after these 
individuals leave the employment of the OCC. Specifically, subpart E 
prohibits a senior examiner of a national bank from knowingly accepting 
compensation from that bank or a company that controls that bank for 
one year after leaving the employment of the OCC, if such individual 
was the bank's senior examiner for two or more months during the last 
12 months of OCC employment. The OTS applied substantively identical 
restrictions derived from the same statutory authority as the OCC rules 
on its senior examiners of savings associations at 12 CFR part 507.\8\
---------------------------------------------------------------------------

    \8\ See 12 U.S.C. 1820(k).
---------------------------------------------------------------------------

    The OCC is proposing amendments to subpart E as part of its 
integration of the functions and former employees of the OTS. The 
resulting OCC regulation would include the same one-year post-
employment restrictions that were imposed on senior examiners of 
national banks and savings associations when the OCC and OTS operated 
under separate regulations. Section 507 will be repealed at a later 
date, as it no longer will be necessary.
    Definitions (Sec.  4.73). Section 4.73 defines certain terms used 
in subpart E. Specifically, Sec.  4.73 defines a ``consultant'' of a 
national bank, bank holding company, or other company as one who works 
directly on matters for, or on behalf of, the bank, bank holding 
company, or other company. It defines ``control'' as having the meaning 
given in section 2 of the Bank Holding Company Act (12 U.S.C. 1841(a)). 
In the proposal, the OCC amends these definitions to encompass its 
oversight of Federal savings associations. Specifically, we propose to 
amend the definition of ``consultant'' to include also a consultant of 
a savings association or savings and loan holding company. We also 
propose to amend the definition of ``control'' to include reference to 
section 10 of the Home Owners' Loan Act (12 U.S.C. 1467a) when 
referring to a savings association or a savings and loan holding 
company.
    The proposal further adds the definitions of ``savings 
association'' and ``savings and loan holding company.'' Specifically, 
``savings association'' would have the meaning given in section 3 of 
the FDI Act (12 U.S.C. 1813(b)(1)). ``Savings and loan holding 
company'' would mean any company that controls a savings association or 
any other company that is a savings and loan holding company (as 
provided in section 10 of the Home Owners' Loan Act (12 U.S.C. 1467a)).
    In addition, the proposal amends the definition of ``senior 
examiner.'' Currently, Sec.  4.73 defines ``senior examiner'' as an OCC 
officer or employee who has been authorized by the OCC to examine 
national banks and who meets certain other criteria. The OCC proposes 
to apply this same definition to officers and employees who examine 
Federal savings associations.
    The OCC is aware that for one year following the transfer date, a 
senior examiner subject to the one-year post employment restriction may 
have worked for both the OTS and OCC during the one-year look-back 
period. We have drafted the proposed rule to address this situation by 
referring to either the OCC or the OTS as having had the authority to 
authorize the senior examiner's activities during this one-year look 
back period. One year after the transfer date, references to former OTS 
employment will not be needed, and the provision that references the 
OTS will sunset. It will be replaced by a provision that only addresses 
prior OCC employment.
    One-year post-employment restrictions (Sec.  4.74). Section 4.74 
contains the post-employment prohibition for senior examiners. As noted 
above, as of the transfer date, the OCC will assume responsibility for 
examining Federal savings associations and will employ former OTS 
employees, including the senior examiners, authorized to examine these 
institutions. Accordingly, the OCC proposes to amend Sec.  4.74 to 
extend its post-employment restrictions to senior examiners of Federal 
savings associations and to their employment with such savings 
associations and controlling savings and loan holding companies.
    As also noted above, however, for one year following the transfer 
date, the 12-month look-back window will include a period during which 
a savings association senior examiner may have been authorized by the 
OTS to conduct thrift examinations. The proposed language of Sec.  4.74 
addresses this period of time by referencing employment with the OCC 
and the OTS. One year post-transfer, the obsolete references to the OTS 
will sunset.
    Effective Date; Waivers (Sec.  4.75). Section 4.75 states that the 
post-employment restrictions set forth in Sec.  4.74 do not apply to 
any current or former OCC officer or employee if the Comptroller finds 
that granting the individual a waiver would not affect the integrity of 
the OCC's supervisory program. The OCC proposes to amend Sec.  4.75 to 
recognize the Comptroller's authority to issue similar waivers for 
former OTS employees during the first year after the transfer date. 
After this time period, there will no longer be former OTS senior 
examiners who are subject to the post-employment restrictions. 
Therefore, one year after the transfer date, references in Sec.  4.75 
to former OTS employees will sunset.
    The proposal also makes a technical amendment to this section by 
deleting Sec.  4.75(a), which contains an obsolete reference to those 
who worked for the OCC prior to 2005. Conforming structural changes are 
made to the section in light of the deletion of this subsection.
    Penalties (Sec.  4.76). This section sets forth the penalties that 
apply to a senior examiner who violates the one-year post-employment 
restrictions set forth in Sec.  4.74. Section 4.76(a) states that this 
individual may be subject to an order (a) removing him from office or 
prohibiting him from participating in the affairs of the relevant bank, 
bank holding company, or other company that controls such institution 
for up to five years; and (b) prohibiting him from participating in the 
affairs of any insured depository institution for up to five years. 
Alternatively, he may be subject to a civil money penalty of not more 
than $250,000. Paragraphs (b) through (e) set forth the mechanics by 
which the penalties listed in subsection (a) are administered.
    The proposal amends this section to include Federal savings 
associations, Federal savings association senior examiners, and former 
OTS employees within the scope of the Sec.  4.76 penalty provisions. As 
noted above, language referencing former OTS employees will sunset one 
year after the transfer date, at which time the post-employment 
provisions no longer apply to former OTS employees.
    Finally, the proposal makes a technical correction to this 
provision. The current provision incorrectly provides that penalties 
will be applied when the senior examiner of a bank accepts compensation 
from that bank at any time after leaving the employment of the OCC. 
This amendment limits the penalties to violations that occur during

[[Page 30562]]

the one-year look-back period, the time period during which such 
employment is prohibited by the rule.

2. Dodd-Frank Act Amendments Affecting Approval of Change in Control 
Notices and Acceptance of Deposits by Federal Branches (Parts 5 and 28)

    This proposal contains amendments to 12 CFR part 5 to implement 
section 603 of the Dodd-Frank Act. Section 603 provides for a three-
year moratorium (with certain exceptions) on the approval of a change 
in control of credit card banks, industrial banks and trust banks, if 
the change in control would result in a commercial firm controlling 
(directly or indirectly) such a bank. The moratorium took effect on the 
date of enactment of the Act, i.e., July 21, 2010. The proposal amends 
12 CFR 5.50(f) to implement this section of the Act.
    Section 6 of the International Banking Act, 12 U.S.C. 3104(b), 
provides that uninsured Federal branches of foreign banks may not 
accept deposits in an amount of less than the standard maximum deposit 
insurance amount (SMDIA). The SMDIA is defined in 12 U.S.C. 
1821(a)(1)(E) to mean $100,000, subject to certain adjustments provided 
for in the statute. Section 335 of the Dodd-Frank Act, which takes 
effect on the transfer date, amends 12 U.S.C. 1821(a)(1)(E) to change 
the amount from $100,000 to $250,000. Section 28.16(b) of the OCC's 
regulations states that an uninsured Federal branch may accept initial 
deposits of less than $100,000 only from certain persons. In order to 
conform this section of the OCC's regulations to the statutory changes 
and to prevent the need to continually amend this section for changes 
in the SMDIA, the proposal amends 12 CFR 28.16(b) to refer to 12 U.S.C. 
1821(a)(1)(E), rather than the obsolete reference to $100,000.

3. Dodd-Frank Act Provisions Affecting Preemption and Visitorial Powers 
(Parts 5, 7, and 34)

a. Preemption
    The Dodd-Frank Act contains provisions that affect the scope of 
national bank preemption, effective as of the transfer date.\9\ The Act 
eliminates preemption of state law for national bank subsidiaries, 
agents and affiliates.\10\ We therefore propose to rescind 12 CFR 
7.4006, which is the OCC's regulation concerning the application of 
state laws to national bank operating subsidiaries.
---------------------------------------------------------------------------

    \9\ Section 1044, which amends chapter one of title LXII of the 
Revised Statutes by inserting a new section 5136C, contains the 
principal national bank preemption provisions.
    \10\ Dodd-Frank Act sections 1044(a), 1045, 124 Stat. 1376, 
2016, 2017 (July 21, 2010).
---------------------------------------------------------------------------

    The Act also changes the preemption standards applicable to Federal 
savings associations to conform to those applicable to national 
banks.\11\ The Act specifically provides that, as of the transfer date, 
determinations by a court or by the OCC under the Home Owners' Loan Act 
(HOLA) with respect to Federal savings associations must be made in 
accordance with the laws and legal standards applicable to national 
banks regarding the application of state law.\12\
---------------------------------------------------------------------------

    \11\ Dodd-Frank Act section 1046, 124 Stat. 2017 (to be codified 
at 12 U.S.C. 1465). In addition, the Act states that the provisions 
in section 1044 regarding visitorial powers shall apply to Federal 
savings associations and their subsidiaries to the same extent and 
in the same manner as if they were national banks or national bank 
subsidiaries. Dodd-Frank Act section 1047(b), 124 Stat. 2018 (to be 
codified at 12 U.S.C. 1465).
    \12\ Id.
---------------------------------------------------------------------------

    In order to implement this standard for Federal savings 
associations, the OCC is proposing amendments to its regulations to 
apply national bank standards on preemption and visitorial powers to 
Federal savings associations and their subsidiaries to the same extent 
and in the same manner as these standards apply to national banks and 
their subsidiaries.\13\
---------------------------------------------------------------------------

    \13\ To fulfill this statutory mandate, the affected OTS 
preemption regulations will be repealed.
---------------------------------------------------------------------------

    In addition, section 1044 of the Dodd-Frank Act contains several 
provisions addressing preemption of ``state consumer financial 
laws.''\14\ The Act provides that ``state consumer financial laws'' may 
be preempted only if: (1) Application of such a law would have a 
``discriminatory effect'' on national banks compared with state-
chartered banks in that state; (2) ``in accordance with the legal 
standard for preemption'' in the Supreme Court's decision in Barnett 
Bank of Marion County, N.A. v. Nelson,\15\ the state consumer financial 
law ``prevents or significantly interferes with the exercise by the 
national bank of its powers'' (``Barnett standard'' preemption); or (3) 
the state consumer financial law is preempted by a provision of Federal 
law other than Title LXII of the Revised Statutes.\16\
---------------------------------------------------------------------------

    \14\ The Dodd-Frank Act defines the term ``state consumer 
financial law'' to mean a state law that (1) does not directly or 
indirectly discriminate against national banks and that (2) directly 
and specifically (3) regulates the manner, content, or terms and 
conditions of (4) any financial transaction or related account (5) 
with respect to a consumer. Dodd-Frank Act section 1044(a), 124 
Stat. at 2014-2015.
    \15\ 517 U.S. 25 (1996).
    \16\ Dodd-Frank Act section 1044(a), 124 Stat. at 2015.
---------------------------------------------------------------------------

    Because these provisions only apply to preemption of ``state 
consumer financial laws,'' they do not affect the application of OCC 
regulations to state laws that do not come within that definition. We 
have therefore examined whether these Dodd-Frank provisions, and 
particularly the Barnett standard preemption provision, require changes 
to our rules with respect to that category of state law.
    The language of the Barnett standard preemption provision in the 
final legislation differs substantially from earlier versions of the 
legislation. The version of the legislation passed by the House of 
Representatives made no reference to the Barnett decision.\17\ 
Important changes were made in the Senate as the legislation progressed 
and sponsors of key language that was ultimately adopted have explained 
that the changes were intended to provide consistency and legal 
certainty by preserving the preemption standard of the Supreme Court's 
Barnett decision.\18\
---------------------------------------------------------------------------

    \17\ See H.R. 4103, 111th Cong. section 4404 (as passed by the 
House of Representatives Dec. 11, 2009).
    \18\ See 156 Cong. Rec. S5870-02, 2010 WL 2788025 (July 15, 
2010) (colloquy between Senator Carper, the sponsor of the key 
language in the Barnett standard preemption provision, and Chairman 
Dodd). The same understanding was stated by Senator Johnson. See 156 
Cong. Rec. S5889 (July 15, 2010).
---------------------------------------------------------------------------

    This is consistent with both the language of the statute and the 
substance of the Barnett decision. The Barnett standard preemption 
provision instructs that preemption will occur, if, ``in accordance 
with the legal standard for preemption in the decision of the Supreme 
Court'' in Barnett, a state consumer financial law ``prevents or 
significantly interferes with the exercise by a national bank of its 
powers.'' \19\ The legal standard for preemption in Barnett is conflict 
preemption and the decision references different formulations of 
conflict to illustrate and explain the nature and level of interference 
with national bank powers that triggers preemption. The phrase 
``prevent or significantly interfere'' is one exemplary formulation of 
conflict preemption used in the decision. It is not the only 
formulation; it is not set apart from the others; and it is not 
presented as a test different from the others; rather, it is part of 
the whole of the Court's reasoning in its decision. Thus, in the 
Barnett preemption provision, the phrase may serve as a touchstone or 
starting point in the analysis, but it takes meaning from the whole of 
the Supreme Court's decision. Since the phrase must be ``in accordance 
with the legal standard for preemption'' in the decision of the Court, 
the analysis may

[[Page 30563]]

not simply stop and isolate those terms from the rest of the decision; 
it is necessary to take into account the whole of the conflict 
preemption analysis in the Supreme Court's decision.\20\ Notably, a 
recent decision handed down by the 11th Circuit Court of Appeals cited 
other formulations of conflict preemption used in the Barnett decision 
for the conclusion that under the Dodd-Frank Act, the proper preemption 
test is conflict preemption.\21\
---------------------------------------------------------------------------

    \19\ Dodd-Frank Act section 1044(a), 124 Stat. at 2015.
    \20\ The Barnett decision describes in detail the analysis under 
the Barnett conflict preemption standard. 517 U.S. at 33-34.
    \21\ Baptista v. JPMorgan Chase, N.A., ---- F. 3d ------, (11th 
Cir. May 11, 2011) (``Thus it is clear that under the Dodd-Frank 
Act, the proper preemption test asks whether there is a significant 
conflict between the state and Federal statutes--that is, the test 
for conflict preemption.'').
---------------------------------------------------------------------------

    This result is supported by other precedent and portions of section 
1044 of the Dodd-Frank Act. The Barnett standard preemption provision 
uses language virtually identical to that used in section 104(d)(2)(A) 
of the Gramm-Leach-Bliley Act of 1999 (GLBA).\22\ The leading case 
applying that standard similarly treated the phrase ``prevents or 
significantly interferes'' as a reference to the whole of the Court's 
Barnett preemption analysis and referred to the GLBA statutory language 
as ``the traditional Barnett Bank standards.'' \23\ Other portions of 
section 1044 similarly convey that the Barnett standard preemption 
provision refers to the legal standard for conflict preemption 
contained in the whole of the Court's decision.\24\
---------------------------------------------------------------------------

    \22\ See 15 U.S.C. 6701(d)(2)(A).
    \23\ Association of Banks in Insurance Inc. v. Duryee, 270 F.3d 
397, at 405, 408 (6th Cir. 2001).
    \24\ The related requirement that the OCC must have 
``substantial evidence'' on the record to support adoption of 
preemption rules or orders under this standard refers to the legal 
standard of the Barnett decision, not to a different standard based 
on a single phrase used in that decision, and thus incorporates the 
entirety of Barnett's conflict preemption analysis upon which the 
decision was founded. See Dodd-Frank Act section 1044(a), 124 Stat. 
at 2016 (providing that regulations and orders promulgated under 
Barnett standard preemption do not affect the application of a state 
consumer financial law to a national bank unless substantial 
evidence made on the record of the proceeding supports the specific 
finding of preemption ``in accordance with the legal standard of the 
decision of the Supreme Court of the United States in Barnett Bank 
of Marion County, N.A. v. Nelson, Florida Insurance Commissioner, et 
al., 517 U.S. 25 (1996).'')
---------------------------------------------------------------------------

    The OCC recognizes that the manner in which preemption under the 
Barnett case is stated in Dodd-Frank also could have been intended to 
clarify that standard relative to how current OCC regulations have 
distilled principles from the Barnett case. Portions of our current 
regulations provide that state laws that ``obstruct, impair, or 
condition'' a national bank's powers are not applicable to national 
banks. This formulation has created ambiguities and misunderstandings 
regarding the preemption standard that it was intended to convey. We 
are therefore proposing to remove this language where it appears in our 
regulations and to remove 12 CFR 7.4009 in its entirety. This language 
was drawn from an amalgam of prior precedents relied upon in the 
Supreme Court's decision in Barnett, and its elimination will remove 
any ambiguity that the conflict preemption principles of the Supreme 
Court's Barnett decision are the governing standard for national bank 
preemption. To the extent any existing precedent cited those terms in 
our regulations, that precedent remains valid, since the regulations 
were premised on principles drawn from the Barnett case. Going forward, 
however, that formulation would be removed as a regulatory preemption 
standard.
    Accordingly, because the Dodd-Frank Act preserves the Barnett 
conflict preemption standard, OCC's rules \25\ and existing precedents 
(including judicial decisions and interpretations) consistent with that 
analysis are also preserved.\26\ We have reviewed those rules, taking 
into account the definition of a state consumer financial law, to 
confirm that the specific types of laws cited in the rules are 
consistent with the standard for conflict preemption in the Supreme 
Court's Barnett decision.
---------------------------------------------------------------------------

    \25\ See, e.g., 69 FR 1904 (Jan. 13, 2004).
    \26\ See Letters from Acting Comptroller John Walsh to Senator 
Thomas R. Carper and Senator Mark Warner, May 12, 2011. Earlier 
versions of the legislation would have had a retroactive impact by 
creating various new standards for preemption under the National 
Bank Act, invalidating an extensive body of national bank judicial, 
interpretive and regulatory preemption precedent. See H.R. 4103, 
supra note 17. The final version of the Dodd-Frank Act legislation 
did not adopt this approach. Section 1043 of the Act, which dated 
from those early versions of the legislation, was not changed to 
reflect the final version of the legislation, but remains relevant 
in connection with changes in the treatment of preemption for 
national bank subsidiaries, and Federal savings associations and 
their subsidiaries and agents.
---------------------------------------------------------------------------

    We are also proposing clarifications to the OCC's preemption 
regulations regarding the types of laws that would not be preempted 
under the Dodd-Frank Act provisions. Specifically, the proposal amends 
provisions of the regulations describing the types of state laws that 
are not preempted, to make specific reference to the Barnett decision.
    The OCC recognizes that going forward, after the transfer date, the 
Dodd-Frank Act imposes new procedures and consultation requirements 
with respect to how we may reach certain future preemption 
determinations and clarifies the criteria for judicial review of these 
determinations. Specifically, the Act requires that the OCC make 
preemption determinations with regard to state consumer financial laws 
under the Barnett standard by regulation or order on a ``case-by-case 
basis'' in accordance with applicable law.\27\ The Act defines ``case-
by-case basis'' as a determination by the Comptroller as to the impact 
of a ``particular'' state consumer financial law on ``any national bank 
that is subject to that law'' or the law of any other state with 
substantively equivalent terms.\28\
---------------------------------------------------------------------------

    \27\ Dodd-Frank Act section 1044(a), 124 Stat. at 2015.
    \28\ Id. This language was designed ``to permit the OCC to make 
a single determination concerning multiple states' consumer 
financial laws, so long as the law contains substantively equivalent 
terms.'' See S. Rep. 11-176, at 176 (April 30, 2010). The Act 
contains no statement that Congress intended to retroactively apply 
these procedural requirements to overturn existing precedent and 
regulations, and that interpretation would be contrary to the 
presumption against retroactive legislation. See e.g., Landgraf v. 
USI Film Products, 511 U.S., 272-73 (1994).
---------------------------------------------------------------------------

    When making a determination under this provision that a state 
consumer financial law has substantively equivalent terms as the law 
the OCC is preempting, the OCC must first consult with and take into 
account the views of the Consumer Financial Protection Bureau (CFPB) in 
making that determination. We note that this consultation process 
synchronizes with the role and authorities granted to the CFPB under 
the Dodd-Frank Act. It can inform the CFPB's exercise of its authority 
to enhance Federal consumer protection rules, and that rulemaking 
process, in turn, includes consultation with appropriate prudential 
regulators.\29\
---------------------------------------------------------------------------

    \29\ Dodd-Frank Act section 1022(b), 124 Stat. at 1981.
---------------------------------------------------------------------------

    The Dodd-Frank Act also requires there to be substantial evidence, 
made on the record of the proceeding, to support an OCC order or 
regulation that declares inapplicable a state consumer financial law 
under the Barnett standard. Finally, the Act requires the OCC to 
conduct a periodic review, subject to notice and comment, every 5 years 
after issuing a preemption determination relating to a state consumer 
financial law and to publish a list of such preemption determinations 
every quarter.\30\
---------------------------------------------------------------------------

    \30\ Dodd-Frank Act section 1044(a), 124 Stat. at 2016.
---------------------------------------------------------------------------

b. Visitorial Powers
    The National Bank Act, at 12 U.S.C. 484, vests in the OCC exclusive 
visitorial powers with respect to national banks, subject to certain

[[Page 30564]]

express exceptions.\31\ On June 29, 2009, the Supreme Court issued its 
opinion in Cuomo v. Clearing House Association, L.L.C.\32\ The Court 
held that when a state attorney general files a lawsuit to enforce a 
state law against a national bank, ``[s]uch a lawsuit is not an 
exercise of `visitorial powers' and thus the Comptroller erred by 
extending the definition of `visitorial powers' to include `prosecuting 
enforcement actions' in state courts.'' \33\ At the same time, the 
decision recognized the ``regime of exclusive administrative oversight 
by the Comptroller'' \34\ applicable to national banks. Accordingly, 
under Cuomo, a state attorney general may bring an action against a 
national bank in a court of appropriate jurisdiction to enforce non-
preempted state laws, but is restricted in conducting non-judicial 
investigations or oversight of a national bank.
---------------------------------------------------------------------------

    \31\ The statute provides that ``[n]o national bank shall be 
subject to any visitorial powers except as authorized by Federal 
law, vested in the courts of justice or such as shall be, or have 
been exercised or directed by Congress or by either House thereof or 
by any committee of Congress or of either House duly authorized.''
    \32\ 129 S. Ct. 2710 (2009).
    \33\ Id. at 2721.
    \34\ Id. at 2718.
---------------------------------------------------------------------------

    The Dodd-Frank Act expressly codifies the Supreme Court's decision 
in Cuomo regarding enforcement of state law against national banks by 
providing that no provision or other limits restricting the visitorial 
powers to which a national bank is subject shall be construed to limit 
or restrict the authority of any state attorney general to ``bring an 
action against a national bank in a court of appropriate jurisdiction 
to enforce an applicable law and to seek relief as authorized by such 
law.'' \35\ Accordingly, the OCC is revising Sec.  7.4000 to provide 
that an action by a state attorney general (or other chief law 
enforcement officer) in a court of appropriate jurisdiction to enforce 
a non-preempted state law against a national bank and seek relief as 
authorized thereunder is not an exercise of visitorial powers under 12 
U.S.C. 484.
---------------------------------------------------------------------------

    \35\ Dodd-Frank Act section 1047(a), 124 Stat. 2018 (to be 
codified at 12 U.S.C. 25b). The Act also amends HOLA to apply the 
same visitorial standard that applies to national banks to Federal 
savings associations and their subsidiaries. Dodd-Frank Act section 
1047(b), 124 Stat. 2018 (to be codified at 12 U.S.C. 1465).
---------------------------------------------------------------------------

c. Description of the Proposed Rule
    The proposal accordingly amends provisions of the OCC's regulations 
relating to preemption (12 CFR 7.4007, 7.4008, 7.4009, and 34.4), 
operating subsidiaries (12 CFR 5.34 and 7.4006), and visitorial powers 
(12 CFR 7.4000).
     The proposal adds Sec. Sec.  7.4010(a) and 34.6 to provide 
that state laws apply to Federal savings associations and their 
subsidiaries to the same extent and in the same manner that those laws 
apply to national banks and their subsidiaries. The proposal also adds 
Sec.  7.4010(b) to subject Federal savings associations and their 
subsidiaries to the same visitorial powers provisions that apply to 
national banks and their subsidiaries.
     The proposal makes conforming changes to Sec. Sec.  
7.4007, 7.4008, and 34.4. It revises paragraphs (b) in Sec. Sec.  
7.4007, (d) in Sec.  7.4008, and (a) in Sec.  34.4 by removing the 
phrase ``state laws that obstruct, impair, or condition a national 
bank's ability to fully exercise its Federally authorized * * * powers 
are not applicable to national banks.'' The proposal further clarifies 
that a state law is not preempted to the extent consistent with the 
Barnett decision.
     The proposal deletes Sec.  7.4009.
     The proposal deletes Sec.  7.4006, which governs 
applicability of state laws to national bank operating subsidiaries. 
The proposal also makes conforming revisions to 12 CFR 5.34(a) and 
subsection (e)(3) by expressly referencing the new section 12 U.S.C. 
25b adopted by the Dodd-Frank Act, which provides that Title LXII of 
the Revised Statutes and section 24 of the Federal Reserve Act (12 
U.S.C. 371) do not preempt, annul, or affect the applicability of any 
state law to any subsidiary, affiliate, or agent of a national bank 
(other than a subsidiary, affiliate, or agent that is chartered as a 
national bank).
     The proposal makes a number of changes to Sec.  7.4000 to 
conform the regulations to the Supreme Court's decision in the Cuomo 
case as adopted by the Dodd-Frank Act. First, it adds a reference to 12 
U.S.C. 484 in Sec.  7.4000(a)(1). Second, it revises paragraph 
(a)(2)(iv) by adding ``investigating or'' before ``enforcing compliance 
with any applicable Federal or State laws concerning those 
activities.'' This incorporates the Cuomo Court's recognition that 
nonjudicial investigations generally constitute an exercise of 
visitorial powers.\36\ Third, it adds a new paragraph (b), which 
specifically provides that ``[i]n accordance with the decision of the 
Supreme Court in Cuomo v. Clearing House Assn., L.L.C., 129 S. Ct. 2710 
(2009), an action against a national bank in a court of appropriate 
jurisdiction brought by a state attorney general (or other chief law 
enforcement officer) to enforce a non-preempted state law against a 
national bank and to seek relief as authorized thereunder is not an 
exercise of visitorial powers under 12 U.S.C. 484.'' Fourth, it 
redesignates paragraphs (b) and (c) as new paragraphs (c) and (d) and 
makes conforming revisions to Sec.  7.4000(c)(2), which provides an 
exception from the general rule in Sec.  7.4000(a)(1) for such 
visitorial powers as are vested in the courts of justice.
---------------------------------------------------------------------------

    \36\ The Court stated that:
    The request for information [by the Attorney General] in the 
present case was stated to be ``in lieu of'' other action; implicit 
was the threat that if the request was not voluntarily honored, that 
other action would be taken. All parties have assumed, and we agree, 
that if the threatened action would have been unlawful the request-
cum-threat could be enjoined. Here the threatened action was not the 
bringing of a civil suit, or the obtaining of a judicial search 
warrant based on probable cause, but rather the Attorney General's 
issuance of subpoena on his own authority under New York Executive 
Law, which permits such subpoenas in connection with his 
investigation of ``repeated fraudulent or illegal acts * * * in the 
carrying on, conducting or transaction of business.'' See N.Y. Exec. 
Law Ann. Sec.  63(12) (West 2002). That is not the exercise of the 
power of law enforcement ``vested in the courts of justice'' which 
12 U.S.C. 484(a) exempts from the ban on exercise of supervisory 
power.
    Accordingly, the injunction below is affirmed as applied to the 
threatened issuance of executive subpoenas by the Attorney General 
for the State of New York, but vacated insofar as it prohibits the 
Attorney General from bringing judicial enforcement actions.
    Cuomo, 129 S. Ct. at 2721-2722 (emphasis added).
-----------