4TH CIRCUIT UPHOLDS OCC’S PREEMPTION OF WEST VIRGINIA LAW
In Cline v. Hawke, 2002 WL 31557392 (4th Cir. Nov. 19, 2002), an unpublished opinion of a three‑judge panel of the United States Court of Appeals for the Fourth Circuit, the court upheld an Office of the Comptroller of the Currency (“OCC”) opinion that concluded that Section 104 of the Gramm‑Leach‑Bliley Act (“GLBA”) preempts certain portions of the West Virginia Insurance Sales Consumer Protection Act (“CPA”).
The case involved a petition by the Insurance Commissioner of the State of West Virginia and the State of West Virginia for review of the 2001 OCC preemption opinion. The OCC’s 2001 opinion considered certain provisions of the West Virginia CPA, which sets forth numerous requirements regarding insurance sales, solicitation, and cross‑marketing activities of financial institutions, including national banks. In reviewing seven sections of the CPA, the OCC determined that under the preemption standards of the GLBA, three were preempted and one was preempted in part. The OCC opinion also considered one additional section of the CPA, which it determined to be preempted by the federal Fair Credit Reporting Act.
In reviewing the OCC’s 2001 opinion, the court considered whether the OCC had authority to interpret the GLBA and, if so, whether the OCC properly exercised such authority. The court also considered what deference to give the OCC’s interpretation. The court found that the language of the GLBA clearly gave the OCC interpretive authority as to the GLBA. Additionally, the court found that the GLBA entitled the OCC to some level of deference with respect to its interpretations and that such deference is to be governed by the standards set forth in Skidmore v. Swift & Co., 323 U.S. 134 (1944) ( i.e., the OCC’s interpretation is entitled to deference to the extent such interpretation has the “power to persuade”). Finding that the OCC had been thorough in its review of the provisions of the CPA ( e.g., the OCC had considered public comments prior to its preemption determination) and that it had used valid reasoning in its decision, the court dismissed the petition for review.