The potential for legal challenges to OCC powers that allow the agency to exempt—or preempt—national banks and thrifts from state consumer finance laws is causing uncertainty in the banking industry. Ballard Spahr partner Alan Kaplinsky said banks may want to prepare for potential legal risk.

“The OCC has been consistent in their view, but there is uncertainty here and that’s created by the fact that there are a number of people who disagree with that view, including the Treasury, state bank supervisors, state attorneys general, class action lawyers and consumer advocates,” Mr. Kaplinsky said. “What this means to me is that (the OCC’s preemption standard) will be the source of a lot of litigation over the next several years.”

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Bank Regulation and Supervision 
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