About Us | Contact Us
View Cart

OCC Issues Final Rule: Dodd-Frank Act

By Vigilize | Wednesday, August 24, 2011 - Leave a Comment

The Office of the Comptroller of the Currency (OCC) posted this as a press release on July 20th. For those that didn’t see it, I’m reposting it for your benefit, and the benefit of others that may need the information.


The Office of the Comptroller of the Currency issued a final rule implementing several provisions of the Dodd-Frank Act, including changes to facilitate the transfer of functions from the Office of Thrift Supervision and revisions to the OCC’s rules on preemption and visitorial powers. The OCC issued a notice of proposed rulemaking for this final rule on May 26, 2011.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the OCC assumes responsibility for the ongoing examination, supervision, and regulation of federal savings associations on July 21.

This final rule contains 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 amendments to OCC rules pertaining to preemption and visitorial powers.

The preemption and visitorial-powers amendments:

  • Eliminate preemption for operating subsidiaries of national banks and operating subsidiaries of Federal savings associations;
  • Apply to federal thrifts the same preemption standard – that is, a conflict preemption standard and not an occupation of the field standard – as applies to national banks, and apply to Federal thrifts the visitorial powers standards applicable to national banks;
  • Eliminate ambiguity concerning the preemption standards in OCC regulations by removing language from OCC rules that provides that state laws that “obstruct, impair, or condition” a national bank’s powers are preempted; and
  • Revise the OCC’s visitorial powers rule to conform the Supreme Court’s Cuomo decision, recognizing the ability of state attorneys general to bring enforcement actions in court to enforce applicable laws against national banks as authorized by such laws.

In response to public comments received, the text of the preemption and visitorial powers amendments was revised to:

  • Add language to clarify that, going forward, federal savings associations will be subject to the same preemption standards that apply to national banks.
  • Clarify the definition of “visitorial powers” in § 7.4000(a)(2)(iv) to include direct investigations of national banks, such as through requests for documents or testimony directed to the bank to ascertain the bank’s compliance with law through mechanisms not otherwise authorized under the rule.
    • – This definition would not include collecting information from other sources, or from the bank through actions that do not constitute visitations, or as authorized under federal law.
  • Modify a new paragraph, (b) § 7.4000, added in the proposed rulemaking which specifically provides that “[i]n accordance with the decision of the Supreme Court in Cuomo . . ., 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 an applicable law against a national bank and to seek relief as authorized by such law is not an exercise of visitorial powers under 12 U.S.C. 484.”
    • – The phrase “applicable law” was added in place of “non-preempted state law” in order to address concerns expressed by public commenters that the latter could be interpreted more narrowly than the former.

The preamble to the final rule expands the discussion of the preemption and visitorial powers provisions to address more thoroughly certain points raised in public comment letters received by the OCC. In particular, the preamble notes that the OCC has reconsidered its position concerning precedent that relied on the “obstructs, impairs, or conditions” standard. To the extent that an existing preemption precedent relies exclusively on the phrase “obstructs, impairs, or conditions” as the basis for a preemption determination, the preamble states that the validity of the precedent would need to be reexamined to ascertain whether the determination is consistent with the Barnett conflict preemption analysis.

The final rule also revises OCC rules in areas that are central to internal agency functions and operations immediately upon the transfer of supervisory jurisdiction for federal savings associations. These include amendments to the OCC’s assessment fee rule to include federal savings associations. Following a transition period, the final rule provides a single assessment schedule for both national banks and federal savings associations. To facilitate the transition of federal thrift supervision from the OTS to the OCC, the OCC will compute assessment fees under both the OCC and OTS schedules for assessments charged in September 2011 and March 2012. Federal savings associations will pay the lesser of the two fees. Beginning with assessments charged in September 2012, the OCC will assess institution fees based on a single fee schedule regardless of charter.

The rule also includes revisions to rules related to OCC organization, the availability and release of information under the Freedom of Information Act (FOIA), and post-employment restrictions for senior examiners.

As part of the integration of the OTS functions into the OCC, the OCC also plans to issue an Interim Final Rule, with a request for comments, that republishes those OTS regulations the OCC has the authority to promulgate and enforce as of the transfer date, renumbered and issued as new OCC rules, with nomenclature and other technical amendments to reflect OCC supervision of federal savings associations. The OCC will consider more comprehensive substantive amendments to these regulations, as appropriate, later this year.

The final rule will be published in the Federal Register tomorrow.


Related link:    Final Rule (PDF)


same_strip_012513

Posted in Compliance

Latest News
    Why It Rhymes With SEEM (And its Not the I Before E Rule) Another one of those Dan’s New Leaf Posts, meant to inspire thought about IT Governance . . . . It’s the Gestalt. The idea that the whole is greater than the sum of it’s parts. That’s not something that is often brought […]
    Another awareness poster for YOUR customers (and users).  Now that we have our own employees aware, maybe it’s time to start posting content for our customers! Download the large versions here: Awareness Poster (Portrait) Awareness Poster (Landscape)   You are welcome to print out and distribute this around your office. Interested in one of ours […]
    Questions about China’s new disclosure laws only highlight the uncertainty about disclosure in general… An article review. China recently made waves in the security world by announcing a new set of data security laws, one of which has added new fuel to a long running debate: how and when should security vulnerabilities be disclosed…and to […]
    Four Conditions … …For Why a Network Can be Anything But a Network! Another one of those Dan’s New Leaf Posts, meant to inspire thought about IT Governance . . . . I have to admit that infotex is being called into engineering meetings with larger organizations these days that are NOT community based banks.  We […]
    Another awareness poster for YOUR customers (and users).  Now that we have our own employees aware, maybe it’s time to start posting content for our customers! Download the large versions here: Awareness Poster (Portrait) Awareness Poster (Landscape)   You are welcome to print out and distribute this around your office. Interested in one of ours […]
    If Zero days need Zero clicks, are there any secure devices in the mix? Tanvee Dhir explores the Pegasus spyware. Another technical post, meant to inspire thought about IT Governance . . . . Introduction Over the past couple of weeks, we have seen multiple stories regarding a powerful piece of spyware called Pegasus sold […]
    Our Lead Non-Technical Auditor takes a look at the new AIO Guidance… Architecture, Infrastructure, and Operations (AIO) is the latest booklet released by the Federal Financial Institutions Examination Council (FFIEC) in their line of  IT Examination Handbooks. It is an update to their 2004 Operations booklet and, as the name implies, expands into the areas […]
    Another awareness poster for YOUR customers (and users).  Now that we have our own employees aware, maybe it’s time to start posting content for our customers! Download the large versions here: Awareness Poster (Portrait) Awareness Poster (Landscape)   You are welcome to print out and distribute this around your office. Interested in one of ours […]
    Many organizations still fail to consider the unique risks posed by cloud computing… An article review. Last month thousands of Western Digital MyCloud device owners learned about the risks of cloud-based solutions the hard way: their data had been wiped remotely due to a flaw in the internet-facing component of their external hard drives. While […]
    infotex does not use Kaseya… We are protecting our Clients! Another blog post meant to inspire thought about IT Governance . . . . To all infotex managed security service Clients: As you may be aware there was a large ransomware attack recently that leveraged a remote management tool called Kaseya that is used by many […]