OCC ISSUES INTERPRETIVE LETTER REGARDING PREEMPTION OF STATE LENDING LAWS

In an interpretive letter published in February 2003, the OCC confirmed that a wholly‑owned operating subsidiary of a national bank, both headquartered in Michigan, may rely on the National Bank Act (12 U.S.C. § 85) and export Michigan’s interest rate for real estate-secured loans made by the subsidiary to residents of states other than Michigan or secured by real estate located in states other than Michigan. Based on relevant OCC regulations regarding operating subsidiaries and exportation authority of national banks and citing Marquette National Bank of Minneapolis v. First Omaha Service Corp. for the proposition that a national bank is located in the state in which the bank’s main office is located, the OCC concluded that, as a national bank operating subsidiary, the subsidiary may export Michigan interest rates under the same terms and conditions applicable to the bank.

Jeff Langer