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September, No. 230a

The Chicago Fed’s 42nd Annual Conference on Bank Structure and Competition, which took place May 17–19, 2006, included a panel on federal preemption of state banking regulation. The panelists discussed the wide-ranging impact of rules issued by the Office of the Comptroller of the Currency, the federal agency that regulates national banks.

Last Updated: 08/22/2006

Federal Preemption of State Bank Regulation: A Conference Panel Summary (Special Issue)

Erin Davis, Tara Rice

In its new rules issued in 2004, the Office of the Comptroller of the Currency (OCC) said that its regulations “preempt”—that is, override—a number of state laws that conflict with a national bank’s exercise of its banking powers. Preemption is a particularly timely issue in the Federal Reserve’s Seventh District, where the Illinois Speaker of the General Assembly recently requested that official state entities not patronize banks that do not comply with Illinois state law. In this Chicago Fed Letter, the authors briefly review the issues surrounding the preemption debate and summarize the panelists’ comments.