Pre-emption Standards and the Dodd-Frank Act: Past, Present and Future

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), signed into law in 2010, contains a series of regulatory reforms aimed in part to combat what was perceived as lax financial regulation that led to the recession of the late 2000s.

One way the Dodd-Frank Act seeks to tighten the reins on national banking institutions is by strengthening the legal standards for the pre-emption of state laws, making it harder for banks to avoid liability under state law. Whereas prior to Dodd-Frank's enactment, national banking institutions enjoyed heavy deference in the area of pre-emption of state laws, Dodd-Frank curbs this deference by requiring a case by case determination of pre-emption and requiring that a state consumer financial services law conflict with the exercise of a national bank's powers before the state law can be pre-empted. Further, the Dodd-Frank Act strips subsidiaries of national banks of the same pre-emption protection enjoyed by national banks and subjects federally-chartered savings banks and federally-regulated savings associations to the same pre-emption standards as those applicable to national banks. The mandated case by case determination standard injects much uncertainty into the pre-emption analysis and ensures much pre-emption litigation for years to come. This OnDemand Webinar will examine the changes in the pre-emption standards and the resulting effects on financial institutions. Learning Objectives: •You will be able to review the new pre-emption standards under the Dodd-Frank Act. •You will be able to discuss recent decisions from various courts interpreting the new preemption standards. •You will be able to explain how the changes in the preemption standards will affect financial institutions. •You will be able to recognize state initiatives for changing federal law.