by Jeff Sovern
That's the question David Dayen raises in an important essay in InTheseTimes, Trump Appointees Are Pushing a Deregulation Plan That Could Dramatically Erode Consumer Protections. As Dayen points out, in the run-up to the Great Recession, the OCC proclaimed that state anti-predatory lending laws were preempted as to national banks. We know how that ended. Now the OCC has announced that it will accept national bank charters from FinTech companies. When states try to regulate FinTech, will the OCC attempt to preempt their efforts too? For example, will the OCC enable nationally-chartered FinTech companies to skirt state limits on payday lending? That would be an ironic twist from lawmakers usually quick to claim the mantle of states' rights, and any such effort is likely to be subject to court challenges, but we could be headed there. Under the Dodd-Frank Act, section 1044, it is probably going to depend on whether the state "law prevents or significantly interferes with the exercise by the national bank of its powers." I haven't looked into that issue enough to know whether this would qualify. But if, as seems likely for the next five or so years, we can't count on the CFPB to protect consumers, and state efforts to protect them can be preempted, consumers could be in trouble when it comes to predatory lending.