Under this rule, the OTS will be merged with the OCC, as required by the Dodd-Frank Act, and this rule thus addresses many procedural issues germane to the assumption by OCC of OTS’s duty to regulate federal savings associations (e.g., assessments, transfer of rulemaking, employment contracts, etc.). However, it also addresses a strategic issue in the Dodd-Frank Act: the scope of OCC preemption powers. It establishes a strong principle of federal preemption that, while somewhat less expansive than previously determined by the OCC and initially proposed, is still a strong federal preemption framework for national banks and federal savings associations. Unless Congress tackles it (unlikely), the rule will stand until overturned in the courts. In the first initial case on this issue, the OCC’s stand was upheld.

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