Bill Haraf, Commissioner of Financial Institutions, was one of the many witnesses who testified last week at the California legislature’s joint informational hearing entitled “The Dodd-Frank Wall Street Reform and Consumer Protection Act: Initial Reactions, Initial Steps and Likely Impacts”. The California Department of Financial Institutions regulates state chartered banks and credit unions (When I served as Commissioner of Corporations, credit unions were regulated by the Department of Corporations).
Commissioner Haraf’s testimony touched upon some of the many impacts of the Dodd-Frank Act on state regulation of financial institutions. One very big change is the roll-back of the Comptroller of the Currency’s power to preempt the application of state laws to national banks, a point echoed by Preston DuFauchard, the Commissioner of Corporations. This certainly portends greater national bank interest in California financial services legislation and regulation. I also expect to see some court battles over preemption.
Commissioner Haraf also spoke about the Financial Stability Oversight Council. As reported in this post last October, Commissioner Haraf was selected as one of the five non-voting members of the FSOC.