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1.5.4 The Role of OCC Preemption Letters

In addition to OCC regulations that directly address preemption, the OCC has issued a number of interpretive letters and other materials that may have an impact on preemption.147 These letters discuss activities in which banks are allowed to engage and do not always address preemption or only do so indirectly.

For example, the OCC has issued interpretive letters stating that a bank’s decision to post checks in high-to-low order, which may increase overdraft and nonsufficient funds fees,148 is consistent with the safety and soundness considerations set forth in the regulation governing authority to charge fees.149 The letters state that they are not addressing the applicability of state law.

Nonetheless, some courts may rely on these letters to find a conflict between federal and state law.150 Courts are not always careful to consider the fact that federal authority for a bank to engage in an activity does not automatically mean that states cannot regulate aspects of that activity.151 Moreover, the OCC’s interpretive letters were typically not issued with public notice and comment, may not have considered all of the circumstances, and should not be viewed as complete immunity for behavior that violates state law. Courts should be especially wary of finding preemption in post-Dodd-Frank Act contracts based on letters that were issued prior to passage of the Dodd-Frank Act or that did not comply with the Dodd-Frank Act’s requirements for preemption.152 The Dodd-Frank Act prohibits preemption-by-letter, limiting the OCC to regulations or orders.153


  • 147 {138} The OCC has catalogued most of these decisions, as well as its preemption decisions, in Office of the Comptroller of the Currency, Activities Permissible for a National Bank, Cumulative, 2011 Annual Edition (Apr. 2012) (available online as companion material to this treatise).

  • 148 {139} See §, infra.

  • 149 {140} OCC Interpretive Letter No. 977, 2002 WL 32872368(Apr. 15, 2002); OCC Interpretive Letter No. 916, 2001 WL 1297814 (May 22, 2001). See § 1.5.6, infra.

  • 150 {141} See, e.g., Gutierrez v. Wells Fargo Bank, 704 F.3d 712 (9th Cir. 2012) (relying on OCC interpretive letters permitting high-to-low posting order, together with deposit-taking preemption regulation, to preempt state law challenge to overdraft fee practices).

  • 151 {142} See, e.g., McClellan v. Chipman Traders’ Nat’l Bank, 164 U.S. 347, 17 S. Ct. 85, 41 L. Ed. 2d 461 (1896) (bank’s power under National Bank Act to take real estate as security for loan did not conflict with state law that “provides that it cannot be done under particular and exceptional circumstances”); National Consumer Law Center, Mortgage Lending § 5.2.3 (3d ed. 2019), updated at See also Atherton v. Fed. Deposit Ins. Corp., 519 U.S. 213, 117 S. Ct. 666, 136 L. Ed. 2d 656 (1997) (upholding state law that imposed stricter standard of care on bank directors than federal law imposed).

  • 152 {143} See § 1.5.2, supra.

  • 153 {144} 12 U.S.C. § 25b(b)(1)(B). See National Consumer Law Center, Mortgage Lending § 5.3.7 (3d ed. 2019), updated at