The Office of the Comptroller of the Currency (OCC) passed a new rule that makes national banking conglomerates exempt from state consumer protection and lending laws. These state laws, including banking, advertising, privacy, and insurance laws, are enacted to protect consumers from predatory lending and other abusive practices. On Feb 12, 2004, the OCC decided that consumers did not need to be protected from large national banks that have federal charters.

The National Association of Realtors (NAR), along with other consumer groups and several US representatives, oppose this rule since it can harm consumers and small businesses. Local lending and real estate companies still have to comply with the entire body of state regulations, creating an unfair competitive advantage for the national institutions. This new rule has already been the subject of a congressional hearing and a budget amendment, with even more hearings scheduled.

I have to question that if these state laws do protect the consumer's interests, why would the OCC, who gets its funding from national bank fees, exempt the national banks from these regulations? Hmmm.

~Dan Hoffman