US bank regulator lays out new pre-emption rules

WASHINGTON Wed May 25, 2011 3:00pm BST

WASHINGTON May 25 (Reuters) - A key U.S. banking regulator released a proposal on Wednesday to revise rules intended to limit its ability to pre-empt state consumer financial laws.

The changes are required by the Dodd-Frank financial oversight law.

The revised rules that the Office of the Comptroller of the Currency, which regulates national banks, laid out details of the process it would undertake when it does decide to pre-empt a state.

Under the proposal, the OCC would have to make determinations on a case-by-case basis and must provide substantial evidence of the reason for pre-empting a state law.

The OCC will also consult with the new Consumer Financial Protection Bureau when making such decisions.

The rule is out for comment through June 27.

(Reporting by Dave Clarke, Editing by Dave Zimmerman)