Opinion ID: 779698
Heading Depth: 3
Heading Rank: 3

Heading: HOLA and OTS Regulations Preempt the Ordinances' ATM Fee Prohibition.

Text: 31 Having determined that the HOLA and OTS regulations permit federal associations to charge ATM fees to nondepositors, we also find that HOLA and OTS preempt the Ordinances. 32 Field preemption is implied when the scheme of federal regulation in a particular field is so pervasive as to leave no room for the States to supplement it. Rice, 331 U.S. at 230, 67 S.Ct. 1146. Federal regulations have no less pre-emptive effect than federal statutes. de la Cuesta, 458 U.S. at 153, 102 S.Ct. 3014. 33 Indeed, the regulation of federal savings associations by the OTS is so pervasive as to leave no room for state regulatory control. Stein, 604 F.2d at 1260. The Ordinances purport to regulate the operations, and the deposit and lending-related practices of federal savings banks. However, OTS regulations occupy these fields. See 12 C.F.R. § 545.2 (asserting field preemption of operations of federal associations); 12 C.F.R. § 557.11(b) (asserting field preemption of deposit-related practices of federal associations); 12 C.F.R. § 560.2(a) (asserting field preemption of lending-related practices of federal associations). 34 OTS Regulation 545 governs the operations of federal savings banks and expressly preempts contrary state law. Section 545.2 provides that the OTS has plenary and exclusive authority ... to regulate all aspects of the operations of Federal savings associations. 12 C.F.R. § 545.2. It also provides that the exercise of this authority is preemptive of any state law purporting to address the subject of the operations of a Federal savings association. Id. 35 The Cities illogically contend that the charging of ATM fees is not part of the operations of a federal savings association. However, operations include funds transfer services, which federal savings associations are authorized to provide with or without fee. 12 C.F.R. § 545.17. Moreover, federal associations are authorized to use electronic means or facilities to perform any function, or provide any product or service. 12 C.F.R. § 555.200(a). 36 Therefore, we hold that the HOLA and OTS regulations together preempt conflicting state limitations on the authority of federal savings associations to collect fees for provision of deposit and lending-related electronic services and that prohibition of ATM fees by the Ordinances is therefore invalid under the Supremacy Clause of the Constitution. Because the ordinances are preempted for attempting to regulate the operations of federal savings banks, we do not discuss the alternate justifications for preemption including field preemption of deposit and lending-related activities as well as conflict pre-emption. 37