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Highlight Updates Preemption Under the Former Rules for Federal Savings Associations

Prior to the Dodd-Frank Act, a sweeping preemption rule adopted by the Office of Thrift Supervision (OTS) had purported to preempt the entire field of lending regulation for federal savings associations.230 A federal court held that a claim that a federal savings association manipulated the order of posting of debits and deposits in order to increase overdrafts was preempted by this regulation.231 Congress explicitly repudiated field preemption when it enacted the Dodd-Frank Act in 2010, and federal savings associations are now governed by the considerably narrower OCC preemption rules,232 so this decision should have little continuing relevance except for contracts governed by the Dodd-Frank Act’s grandfather clause.233


  • 230 {219} Former 12 C.F.R. § 560.2(a). See § 1.5.2, supra.

  • 231 {220} See In re Checking Account Overdraft Litig., 880 F. Supp. 2d 1290 (S.D. Fla. 2012).

  • 232 {221} 12 U.S.C. § 1465(b). See § 1.5.2, supra; National Consumer Law Center, Mortgage Lending §§ 5.3.3, 5.14.2 (3d ed. 2019), updated at

  • 233 {222} See § 1.5.1, supra.