12 U.S.C. § 25b — State law preemption standards for na-

Page 21 TITLE 12—BANKS AND BANKING § 25b ‘‘(5) the State of Michigan was the first State to allow credit unions to offer prize-linked savings prod- ucts, and in 2009 launched the first large-scale prize- linked savings product in the United States; ‘‘(6) the States of Connecticut, Michigan, Maine, Maryland, Nebraska, North Carolina, Rhode Island, and Washington all have laws that allow financial in- stitutions to offer prize-linked savings products; ‘‘(7) in the States of Michigan and Nebraska, more than 42,000 individuals have opened prize-linked sav- ings accounts and saved more than $72,000,000; ‘‘(8) prize-linked savings products have been shown to successfully attract non-savers, the asset poor, and low-to-moderate income groups, providing individ- uals with a new tool to build personal savings; and ‘‘(9) encouraging personal savings is in the national interest of the United States.’’ § 25b. State law preemption standards for na- tional banks and subsidiaries clarified (a) Definitions For purposes of this section, the following definitions shall apply: (1) National bank The term ‘‘national bank’’ includes— (A) any bank organized under the laws of the United States; and (B) any Federal branch established in ac- cordance with the International Banking Act of 1978 [12 U.S.C. 3101 et seq.]. (2) State consumer financial laws The term ‘‘State consumer financial law’’ means a State law that does not directly or in- directly discriminate against national banks and that directly and specifically regulates the manner, content, or terms and conditions of any financial transaction (as may be au- thorized for national banks to engage in), or any account related thereto, with respect to a consumer. (3) Other definitions The terms ‘‘affiliate’’, ‘‘subsidiary’’, ‘‘in- cludes’’, and ‘‘including’’ have the same mean- ings as in section 1813 of this title. (b) Preemption standard (1) In general State consumer financial laws are pre- empted, only if— (A) application of a State consumer finan- cial law would have a discriminatory effect on national banks, in comparison with the effect of the law on a bank chartered by that State; (B) in accordance with the legal standard for preemption in the decision of the Su- preme Court of the United States in Barnett Bank of Marion County, N. A. v. Nelson, Florida Insurance Commissioner, et al., 517 U.S. 25 (1996), the State consumer financial law prevents or significantly interferes with the exercise by the national bank of its pow- ers; and any preemption determination under this subparagraph may be made by a court, or by regulation or order of the Comp- troller of the Currency on a case-by-case basis, in accordance with applicable law; or (C) the State consumer financial law is preempted by a provision of Federal law other than title 62 of the Revised Statutes. (2) Savings clause Title 62 of the Revised Statutes and section 371 of this title do not preempt, annul, or af- fect the applicability of any State law to any subsidiary or affiliate of a national bank (other than a subsidiary or affiliate that is chartered as a national bank). (3) Case-by-case basis (A) Definition As used in this section the term ‘‘case-by- case basis’’ refers to a determination pursu- ant to this section made by the Comptroller concerning the impact of a particular State consumer financial law on any national bank that is subject to that law, or the law of any other State with substantively equiv- alent terms. (B) Consultation When making a determination on a case- by-case basis that a State consumer finan- cial law of another State has substantively equivalent terms as one that the Comp- troller is preempting, the Comptroller shall first consult with the Bureau of Consumer Financial Protection and shall take the views of the Bureau into account when mak- ing the determination. (4) Rule of construction Title 62 of the Revised Statutes does not oc- cupy the field in any area of State law. (5) Standards of review (A) Preemption A court reviewing any determinations made by the Comptroller regarding preemp- tion of a State law by title 62 of the Revised Statutes or section 371 of this title shall as- sess the validity of such determinations, de- pending upon the thoroughness evident in the consideration of the agency, the validity of the reasoning of the agency, the consist- ency with other valid determinations made by the agency, and other factors which the court finds persuasive and relevant to its de- cision. (B) Savings clause Except as provided in subparagraph (A), nothing in this section shall affect the def- erence that a court may afford to the Comp- troller in making determinations regarding the meaning or interpretation of title LXII of the Revised Statutes of the United States or other Federal laws. (6) Comptroller determination not delegable Any regulation, order, or determination made by the Comptroller of the Currency under paragraph (1)(B) shall be made by the Comptroller, and shall not be delegable to an- other officer or employee of the Comptroller of the Currency. (c) Substantial evidence No regulation or order of the Comptroller of the Currency prescribed under subsection (b)(1)(B), shall be interpreted or applied so as to invalidate, or otherwise declare inapplicable to a national bank, the provision of the State con- Page 22 TITLE 12—BANKS AND BANKING § 25b 1 So in original. No par. (2) has been enacted. sumer financial law, unless substantial evi- dence, made on the record of the proceeding, supports the specific finding regarding the pre- emption of such provision in accordance with the legal standard of the decision of the Su- preme Court of the United States in Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance Commissioner, et al., 517 U.S. 25 (1996). (d) Periodic review of preemption determina- tions (1) In general The Comptroller of the Currency shall peri- odically conduct a review, through notice and public comment, of each determination that a provision of Federal law preempts a State con- sumer financial law. The agency shall conduct such review within the 5-year period after pre- scribing or otherwise issuing such determina- tion, and at least once during each 5-year pe- riod thereafter. After conducting the review of, and inspecting the comments made on, the determination, the agency shall publish a no- tice in the Federal Register announcing the decision to continue or rescind the determina- tion or a proposal to amend the determina- tion. Any such notice of a proposal to amend a determination and the subsequent resolution of such proposal shall comply with the proce- dures set forth in subsections (a) and (b) of section 43 of this title. (2) Reports to Congress At the time of issuing a review conducted under paragraph (1), the Comptroller of the Currency shall submit a report regarding such review to the Committee on Financial Serv- ices of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate. The report submitted to the respective committees shall address whether the agency intends to continue, re- scind, or propose to amend any determination that a provision of Federal law preempts a State consumer financial law, and the reasons therefor. (e) Application of State consumer financial law to subsidiaries and affiliates Notwithstanding any provision of title 62 of the Revised Statutes or section 371 of this title, a State consumer financial law shall apply to a subsidiary or affiliate of a national bank (other than a subsidiary or affiliate that is chartered as a national bank) to the same extent that the State consumer financial law applies to any per- son, corporation, or other entity subject to such State law. (f) Preservation of powers related to charging in- terest No provision of title 62 of the Revised Statutes shall be construed as altering or otherwise af- fecting the authority conferred by section 85 of this title for the charging of interest by a na- tional bank at the rate allowed by the laws of the State, territory, or district where the bank is located, including with respect to the mean- ing of ‘‘interest’’ under such provision. (g) Transparency of OCC preemption determina- tions The Comptroller of the Currency shall publish and update no less frequently than quarterly, a list of preemption determinations by the Comp- troller of the Currency then in effect that iden- tifies the activities and practices covered by each determination and the requirements and constraints determined to be preempted. (h) Clarification of law applicable to nondeposi- tory institution subsidiaries and affiliates of national banks (1) Definitions For purposes of this subsection, the terms ‘‘depository institution’’, ‘‘subsidiary’’, and ‘‘affiliate’’ have the same meanings as in sec- tion 1813 of this title. (2) Rule of construction No provision of title 62 of the Revised Stat- utes or section 371 of this title shall be con- strued as preempting, annulling, or affecting the applicability of State law to any sub- sidiary, affiliate, or agent of a national bank (other than a subsidiary, affiliate, or agent that is chartered as a national bank). (i) Visitorial powers (1) 1 In general In accordance with the decision of the Su- preme Court of the United States in Cuomo v. Clearing House Assn., L. L. C. (129 S. Ct. 2710 (2009)), no provision of title 62 of the Revised Statutes which relates to visitorial powers or otherwise limits or restricts the visitorial au- thority to which any national bank is subject shall be construed as limiting or restricting the authority of any attorney general (or other chief law enforcement officer) of any State to bring an action against a national bank in a court of appropriate jurisdiction to enforce an applicable law and to seek relief as authorized by such law. (j) Enforcement actions The ability of the Comptroller of the Currency to bring an enforcement action under title 62 of the Revised Statutes or section 45 of title 15 does not preclude any private party from enforc- ing rights granted under Federal or State law in the courts. (R.S. § 5136C, as added and amended Pub. L. 111–203, title X, §§ 1044(a), 1045, 1047(a), July 21, 2010, 124 Stat. 2014, 2017, 2018.) Editorial Notes REFERENCES IN TEXT The International Banking Act of 1978, referred to in subsec. (a)(1)(B), is Pub. L. 95–369, Sept. 17, 1978, 92 Stat. 607, which enacted chapter 32 (§ 3101 et seq.) and sec- tions 347d and 611a of this title, amended sections 72, 378, 614, 615, 618, 619, 1813, 1815, 1817, 1818, 1820, 1821, 1822, 1823, 1828, 1829b, 1831b, and 1841 of this title, and enacted provisions set out as notes under sections 247, 611a, and 3101 of this title and formerly set out as notes under sections 36, 247, and 601 of this title. For complete clas- sification of this Act to the Code, see Short Title note set out under section 3101 of this title and Tables. Page 23 TITLE 12—BANKS AND BANKING § 27 Title 62 of the Revised Statutes, referred to in sub- secs. (b)(1)(C), (2), (4), (5)(A), (e), (f), (h)(2), (i)(1), and (j), was in the original a reference to ‘‘this title’’ or ‘‘This title’’ meaning title LXII of the Revised Statutes, con- sisting of R.S. §§ 5133 to 5244, which are classified to this section and sections 16, 21, 22 to 24a, 25a, 26, 27, 29, 35 to 37, 39, 43, 52, 53, 55 to 57, 59 to 62, 66, 71, 72 to 76, 81, 83 to 86, 90, 91, 93, 93a, 94, 141 to 144, 161, 164, 181, 182, 192 to 194, 196, 215c, 481 to 485, 501, 541, 548, and 582 of this title. See, also, sections 8, 333, 334, 475, 656, 709, 1004, and 1005 of Title 18, Crimes and Criminal Procedure. For complete classification of R.S. §§ 5133 to 5244 to the Code, see Tables. For classification of title LXII of the Revised Stat- utes of the United States, referred to in subsec. (b)(5)(B), see note above. AMENDMENTS 2010—Subsec. (h). Pub. L. 111–203, § 1045, added subsec. (h). Subsecs. (i), (j). Pub. L. 111–203, § 1047(a), added sub- secs. (i) and (j). Statutory Notes and Related Subsidiaries EFFECTIVE DATE Enactment and amendment of section by Pub. L. 111–203 effective on the designated transfer date, see section 1048 of Pub. L. 111–203, set out as a note under section 5551 of this title. § 26. Comptroller to determine if association can commence business Whenever a certificate is transmitted to the Comptroller of the Currency, as provided in title 62 of the Revised Statutes, and the association transmitting the same notifies the Comptroller that all of its capital stock has been duly paid in, and that such association has complied with all the provisions of title 62 of the Revised Stat- utes required to be complied with before an as- sociation shall be authorized to commence the business of banking, the Comptroller shall ex- amine into the condition of such association, as- certain especially the amount of money paid in on account of its capital, the name and place of residence of each of its directors, and the amount of the capital stock of which each is the owner in good faith, and generally whether such association has complied with all the provisions of title 62 of the Revised Statutes required to entitle it to engage in the business of banking; and shall cause to be made and attested by the oaths of a majority of the directors, and by the president or cashier of the association, a state- ment of all the facts necessary to enable the Comptroller to determine whether the associa- tion is lawfully entitled to commence the busi- ness of banking. (R.S. § 5168; Pub. L. 86–230, § 2, Sept. 8, 1959, 73 Stat. 457.) Editorial Notes REFERENCES IN TEXT Title 62 of the Revised Statutes, referred to in text, was in the original ‘‘this Title’’ meaning title LXII of the Revised Statutes, consisting of R.S. §§ 5133 to 5244, which are classified this section and to sections 16, 21, 22 to 24a, 25a, 25b, 27, 29, 35 to 37, 39, 43, 52, 53, 55 to 57, 59 to 62, 66, 71, 72 to 76, 81, 83 to 86, 90, 91, 93, 93a, 94, 141 to 144, 161, 164, 181, 182, 192 to 194, 196, 215c, 481 to 485, 501, 541, 548, and 582 of this title. See, also, sections 8, 333, 334, 475, 656, 709, 1004, and 1005 of Title 18, Crimes and Criminal Procedure. For complete classification of R.S. §§ 5133 to 5244 to the Code, see Tables. CODIFICATION R.S. § 5168 derived from act June 3, 1864, ch. 106, § 17, 13 Stat. 104, which was the National Bank Act. See sec- tion 38 of this title. AMENDMENTS 1959—Pub. L. 86–230 substituted ‘‘all’’ for ‘‘at least 50 per centum’’ before ‘‘of its capital stock’’. Executive Documents EXCEPTION AS TO TRANSFER OF FUNCTIONS Functions vested by any provision of law in Comp- troller of the Currency, referred to in this section, not included in transfer of functions to Secretary of the Treasury, see note set out under section 1 of this title. § 27. Certificate of authority to commence bank- ing (a) If, upon a careful examination of the facts so reported, and of any other facts which may come to the knowledge of the Comptroller, whether by means of a special commission ap- pointed by him for the purpose of inquiring into the condition of such association, or otherwise, it appears that such association is lawfully enti- tled to commence the business of banking, the Comptroller shall give to such association a cer- tificate, under his hand and official seal, that such association has complied with all the pro- visions required to be complied with before com- mencing the business of banking, and that such association is authorized to commence such business. But the Comptroller may withhold from an association his certificate authorizing the commencement of business, whenever he has reason to suppose that the shareholders have formed the same for any other than the legiti- mate objects contemplated by title 62 of the Re- vised Statutes. A National Bank Association, to which the Comptroller of the Currency has here- tofore issued or hereafter issues such certificate, is not illegally constituted solely because its op- erations are or have been required by the Comp- troller of the Currency to be limited to those of a trust company and activities related thereto. (b)(1) The Comptroller of the Currency may also issue a certificate of authority to com- mence the business of banking pursuant to this section to a national banking association which is owned exclusively (except to the extent direc- tors’ qualifying shares are required by law) by other depository institutions or depository in- stitution holding companies and is organized to engage exclusively in providing services to or for other depository institutions, their holding companies, and the officers, directors, and em- ployees of such institutions and companies, and in providing correspondent banking services at the request of other depository institutions or their holding companies (also referred to as a ‘‘banker’s bank’’). (2) Any national banking association char- tered pursuant to paragraph (1) shall be subject to such rules, regulations, and orders as the Comptroller deems appropriate, and, except as otherwise specifically provided in such rules, regulations, or orders, shall be vested with or subject to the same rights, privileges, duties, re-