On July 13, 2004, the United States Court of Appeals for the District of Columbia Circuit ruled that the Office of Thrift Supervision (OTS) did not exceed its statutory authority in promulgating a final rule pursuant to the Alternative Mortgage Transaction Parity Act, 12 U.S.C. §§ 3801 et seq. (“Parity Act”), designating certain of its alternative mortgage transaction regulations (e.g., prepayment penalty and late fee regulations) inapplicable to state-chartered housing creditors. National Home Equity Mortgage Association v. Office of Thrift Supervision, No. 03-5204 (D.C. Cir., July 13, 2004). An alternative mortgage transaction is a mortgage loan for which the term or interest rate or both are adjustable rather than fixed. See 12 U.S.C. § 3802(1). The National Home Equity Mortgage Association a trade association of non-prime mortgage lenders representing state chartered housing creditors other than commercial bank and credit unions, had sought an order declaring the final rule, published at 67 Fed. Reg. 60,542 (Sept. 26, 2002), invalid. The appeals court’s decision affirmed a grant of summary judgment in favor of the OTS by the district court. See 271 F. Supp. 2d 264 (D.D.C. 2003). The district court had concluded that the Parity Act was ambiguous with regard to the scope of state law preempted and that the OTS’ interpretation of the extent of such preemption was based upon a permissible construction of the statute and was therefore entitled to deference under Chevron. See 271 F. Supp. 2d at 270-71, 273; see also Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

Michael Tomkies and Carolyn Melvin