The state s regulation applies to FCUs except for provisions that regulate the rates, terms of repayment and other conditions of loans and lines of credit, which our lending regulation preempts. While New York law provides that mortgage regulations adopted by the state s banking department apply to FCUs, our lending regulation preempts state law regarding rates, terms of repayment and other conditions of FCU loans and lines of credit.
State law includes the constitution, laws, regulations and judicial decisions of any state.
Our lending regulation preempts New York s regulation to the extent it limits or affects rates of interest, finance charges, late charges, closing costs, terms of repayment, and loan conditions such as the loan amount, type of loan, permissible security, eligibility of borrowers and the enforcement of liens on shares. We have identified those provisions in the regulation that are preempted under federal law and therefore inapplicable to FCUs in New York. This provision is preempted by the Fair Credit Reporting Act, which expressly preempts state laws relating to the responsibilities of persons who furnish information to consumer reporting agencies. Our rule provides that, for aspects of transactions that are primarily regulated by federal law other than the Federal Credit Union Act, we will determine the question of preemption under the standards of the relevant federal law. We also note that Section 41.5, which sets out criteria to be considered in licensing or registering lenders, does not apply to FCUs because they are not subject to state law on licensing and registering.