NU Online News Service, April 25, 5:21 p.m. — Washington
House Financial Services Committee Chairman Mike Oxley, R-Findlay, Ohio, is accusing the Office of the Comptroller of the Currency of misinterpreting the intent of Congress.
The OCC has issued documents called “determinations” that conclude that some state laws regulating bank insurance activities should be preempted. The OCC says it has the authority to make such determinations under the Gramm-Leach-Bliley Financial Services Modernization Act of 1999.
In a letter to U.S. Treasury Secretary Paul O’Neill, Oxley says the OCC “is mischaracterizing its authority to make determinations regarding the insurance provisions of the GLBA.”
The clear intent of Congress, Oxley says, is that the states be the regulators for all the insurance activities of all persons, and that states should act as the functional regulators for the insurance activities of national banks.
Oxley’s letter follows a recent determination by the OCC that three sections of a Massachusetts law regulating bank insurance activities should be preempted.
For one thing, Oxley says, the OCC identified the wrong standard for evaluating whether a state law should be preempted.
GLB said the preemption standard is whether a state law “prevents or significantly interferes” with bank insurance sales activities, Oxley says.