The Ninth Circuit held that the OCC regulations preempted some, but not all, of the plaintiffs' claims. The court held that a regulation authorizing national banks to establish "the method of calculating" noninterest charges and fees "in [their] discretion"125 preempted claims premised on the theory that Wells Fargo's posting method was an unfair business practice.
The model is described in two different ways: first, using simple supply and demand curves; and second, using a rate of return diagram that will be used later with the development of a more elaborate macro model of the economy.
Less than a week after the OCC issued its proposed rules, George W. Madison, the General Counsel of the Department of the Treasury, wrote a letter to the Comptroller of the Currency expressing concern about the rules.207 In the letter, Madison expressed concern that the OCC's proposed rule was "inconsistent with the plain language of [Dodd-Frank] and its legislative history," and could be read to preempt broad categories of state law in the future, in violation of Section 1044's requirement that the OCC make "case-by-case" preemption determinations.
172 The OCC has characterized such generally applicable state laws as "establishing the legal infrastructure" surrounding the activities of national banks, and as surviving preemption so long as they "do not regulate the manner, content or extent of the activities authorized for national banks under federal law."173
Uncovering Covered Interest Parity: The Role of Bank Regulation and Monetary Policy By Falk Bräuning and Kovid Puria Full Text Document (pdf) Covered interest parity (CIP) is a concept holding that the interest rates paid on two similar assets that only differ in their denominated currencies should, after controlling for any foreign exchange rate risk, be the same. Fulfilling this condition depends on the idea that international capital mobility is largely frictionless. More specifically, the theory underpinning CIP predicts that converting the amount borrowed in a foreign currency using the foreign exchange (FX) spot market, while simultaneously hedging the resulting exchange rate risk using a foreign exchange forward contract, should result in a cross-currency basis equal to zero.
In affirming a lower court injunction against the OFIS, the Court explained that "in analyzing whether state law hampers the federally permitted activities of a national bank," the proper inquiry "focuse[s] on the exercise of the bank's powers
, "when Congress' command is . . . implicitly contained in" the relevant federal law's "structure and purpose."24 The Court has identified two subcategories of implied preemption. First, "field preemption" occurs "where the scheme of federal regulation is so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it.
Since the inception of the dual banking system, but particularly in the latter half of the 20th century, state regulatory agencies and the OCC have competed for bank charters.68 Some commentators have argued that this "regulatory competition" created by the dual banking system "reduces the likelihood of unimaginative and unresponsive regulation of the banking system that could occur where there is a monopoly of regulation."69 Others, however, have criticized the dual banking system for leading to "competition in laxity"—that is, a "race to the bottom" between federal and state regulators.
A convertible bond offers bond investors the opportunity to convert said bond into a fixed number of shares of common stock at a specific price per share. Investors purchase convertible bonds because the owner can earn interest on a fixed-income investment (and they have the option of converting into the company’s equity).
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Among other things, the OCC took the position that federal law preempted state laws that limited the ability of national banks to:
Parity price describes a price level in two or more assets that represent equal or equivalent value.
. However, because all parties conceded that the issuance of executive subpoenas (that is, subpoenas issued by an executive branch agency or official, as opposed to a court) to national banks would qualify chẵn lẻ banking as an "exercise of supervisory power" that was preempted by the NBA, the Court upheld the injunction as applied to the threatened issuance of executive subpoenas. Id