There are no federal foreclosure laws. Any mortgage holder--including a national bank or thrift--must abide by the terms of the state's foreclosure laws. But in the past few weeks, national banks have started making a new argument: state laws are pre-empted whenever a national bank holds the mortgage, so the states can't make them follow the local rules.[...] The scope of this argument is stunning. Because there is no federal foreclosure law, would the banks be free to do whatever they wanted? Could they simply order families out of their homes? Would federally-charted banks start buying up troubled loans from other banks, then doing their own vigilante expulsions?

I would only add that for those who believe that we need a legal and policy marketplace with 51 or more -- not just one -- innovation centers, it's nice when we win, even when it appears that the correctness of our position is obvious to anyone with knowledge of the subject. But wherever they can, powerful interests are seeking to make it harder for consumers to obtain justice in the state courts, for state attorneys general to exercise their traditional police powers to protect their citizens and for state legislatures to act as laboratories of innovation. More than a few of the powerful interest efforts can be characterized as vigilante policy power plays, but the current courts and administration players are largely with them. We must exercise eternal vigilance to hold their efforts back.

Note that our letter refers to Miller-LaTourette as an amendment to HR 5830, the American Housing Rescue and Foreclosure Prevention Act. HR 5830 became part of a floor package known as HR 3221, which after consideration of a variety of amendments, passed the full House but faces a complicated road, as noted in today's New York Times story Housing Bailout Bill Seems to Be on Shaky Ground by Stephen Labaton and Steven Weisman.

As for the OCC, I have previously and variously referred to it as not just a regulator but as a regulator-cheerleader-preemptor-in-chief.