# O

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| ## Comptroller of the Currency                                        |
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| > Administrator of National Banks                                     |
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Washington, DC 20219

##### Interpretive Letter #998

March 9, 2004 **August 2004**

The Honorable Barney Frank

Ranking Member

Committee on Financial Services

U.S. House of Representatives

Washington, D.C. 20515

Dear Congressman Frank:

Thank you for your letter of February 5, which raises a concern about
the OCC\'s recent regulation addressing the applicability of State laws
to national banks. Your letter raises basically two issues: whether
State anti-discrimination laws are preempted by the new rule, and
whether States may enforce those laws.

First, let me assure you that State anti-discrimination laws are not
preempted by the regulation. The rule preempts only those types of State
laws pertaining to making loans and taking deposits that appear on the
lists contained in the rule. Anti-discrimination laws are on neither
list; thus they are not preempted by the rule. Any question about the
applicability of a particular anti-discrimination law would be dealt
with on a case-by-case basis, applying the "obstruct, impair, or
condition" analysis, which was intended to distill, and will be applied
consistent with, established judicial tests of preemption. Thus, the
standards applicable for determining preemption of a State
anti-discrimination law are not changed by the new rule. Under those
standards, what would generally be understood to be an
"anti-discrimination" law[^1] would *not* be preempted.

With regard to the enforcement of State anti-discrimination laws, the
relative roles of the OCC and the States will likely depend on the
particular type of law at issue. For example, in the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994,[^2] Congress
expressly provided that the OCC enforces any State "fair lending" laws
that are applicable to a national bank\'s interstate branches in a host
state. [^3] The OCC also has been held to be the appropriate authority
to enforce State anti-redlining laws.[^4] Thus, while we agree that
States may enforce many "anti-discrimination" laws against national
banks and their subsidiaries, (and our new rules do not change their
ability to do so), Congress and the courts have recognized types of laws
that could be characterized as "anti-discrimination" laws, where the OCC
does have exclusive enforcement authority.

I hope the foregoing is helpful. We would be pleased to provide you with
any further information you require.

Sincerely,

**signed**

Julie L. Williams

First Senior Deputy Comptroller and Chief Counsel

[^1]: *E.g.*, laws that prohibit lenders from discriminating on the
    basis of race, religion, ethnicity, gender, sexual orientation,
    disability, or the like.

[^2]: Pub. L. 103-328, 108 Stat. 2338 (Sept. 29, 1994).

[^3]: *See* 12 U.S.C. § 36(f)(1)(C).

[^4]: *National State Bank v. Long*, 630 F.2d 981 (3d Cir. 1980)
    (finding that the OCC had exclusive authority to enforce applicable
    provisions of the New Jersey anti-redlining statute with respect to
    national banks).