FDIC Proposes Preemption Parity for Interstate State Banks
The agency would reinterpret FDI Act section 24(j) so insured state-chartered banks serving host states without a branch get the same host-law preemption national banks already enjoy, comments due November 6, 2026.
The FDIC has proposed a reinterpretation of section 24(j) of the Federal Deposit Insurance Act that would extend to FDIC-insured state-chartered banks the host-state law preemption national banks already enjoy when serving a state without opening a branch. Current FDIC regulation ties that preemption to branches; the proposal would instead cover "any branch in the host State... or any services provided in the host State," reaching licensing and registration requirements, contract, tort and criminal law, escrow-interest mandates, and non-interest fee bans such as interchange. It would expressly leave section 27 interest-rate issues and Madden usury questions, payment-data limits, debt-collection rights, and Dodd-Frank consumer-law carve-outs alone. Uninsured state-chartered entities — many state trust companies, Georgia's merchant-acquirer charter, Connecticut's uninsured charter — and non-bank affiliates would not gain; national trust banks would remain the only uninsured institutions with full national bank preemption.
Why sophisticated counsel should care: the rule would let state banks, ILCs, fintech partners and payments firms capture OCC preemption outcomes across states, and the Conference of State Bank Supervisors has publicly supported it. Watch for state and consumer-group opposition, and for litigation testing the FDIC's reliance on its rulemaking authority under 12 U.S.C. 1819(a)(Tenth) and 1820(g) after Loper Bright. Comments close November 6, 2026.