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The OCC sent a letter to the California Air Resources Board on October 29 about two California climate disclosure laws. It asked the board to clarify that national banks and federal savings associations are not required to comply. The release says the laws “would be inconsistent with OCC regulation” and that their application to banks “may well run afoul of the legal framework for preemption and visitation.”
The OCC listed several concerns. It said the laws would put an undue burden on smaller banks and could harm California customers and their banking relationships. It also raised constitutional concerns under the Supremacy Clause. The agency warned that the result could be less competition, higher prices and reduced access to financial services in California.
A letter, for now
The OCC did not issue a formal preemption determination. It sent a letter and said that “the agency will continue to monitor state law developments nationwide and act where appropriate.” The release does not name the two laws, and the full letter is posted as a PDF. State-chartered banks are outside the letter’s reach, so their obligations depend on the laws themselves.
| Concern | What the OCC said |
|---|---|
| Federal law | Inconsistent with OCC regulation |
| Preemption | May conflict with preemption and visitation |
| Smaller banks | An undue burden |
| Customers | Less competition and higher prices |
| Constitution | Concerns under the Supremacy Clause |
Preemption is now being argued in letters before it is argued in court. National banks should keep the letter on file.
- National banks with California operations should file the OCC letter with their compliance analysis of the two laws and track CARB’s reply.
- State-chartered banks should not rely on the letter. Confirm with counsel whether either law reaches you.
Zovos tracks each state law against your charter and footprint. A preemption letter then updates the obligations it covers and leaves the rest in place.
This is for information only and is not legal advice. Confirm whether a state law applies to your institution with counsel.