The United States Government Accountability Office (“GAO”) recently released a report concluding that the Office of the Comptroller of the Currency (“OCC”) followed the statutory framework for rulemaking and applicable executive orders when issuing its final “visitorial powers” and “preemption” rules in January 2004. GAO-06-8 (2005). These rules address the extent to which the National Bank Act, 12 U.S.C. § 85, preempts the application of state and local laws to national banks and their operating subsidiaries. The visitorial powers rule specifically clarifies that federal law commits the supervision of national banks’ banking activities exclusively to the OCC (except where federal law provides otherwise) and that states may not use judicial actions as an indirect means of regulating those activities. 69 Fed. Reg. 1895 (2004). The preemption rule indicates that categories of state laws that relate to bank activities and operations are preempted, describes the test for preemption that the OCC will apply to state laws that do not fall within the identified categories and lists certain types of state laws that are not preempted. 69 Fed. Reg. 1904 (2004).

Notwithstanding the above, the GAO criticized certain aspects of the OCC’s procedures by indicating that it was difficult to determine the basis for some OCC actions or assess the extent of its consultation with stakeholders because the OCC did not always document its actions. In addition, the GAO indicated that the OCC lacked its own guidance or procedures for its rulemaking process and instead used a rulemaking checklist as a guide for completing reviews and routing documents.

Although the OCC disagreed with certain observations made by the GAO in its report, the OCC concurred that its rulemaking process could benefit from detailed written rulemaking procedures. Thus, the OCC indicated that it intended to develop such procedures by the end of 2005; however, it apparently has not yet done so. The OCC also indicated that it intends to enhance its efforts to consult with state officials and organizations where appropriate in connection with rulemaking proceedings.

Jeff Langer and Chuck Gall