Albany Democrat-Herald / Associated Press

Officials upset by pre-empting of consumer laws

SALEM - Federal pre-emption of consumer protection regulations is weakening Oregon's efforts at consumer safeguards, Attorney General Hardy Myers and state regulators said Thursday.

A new report issued by the Oregon State Public Interest Research Group said the federal government increasingly is pre-empting the right of states to deal with consumer issues and is establishing federal law as a "ceiling" on what states can do.

Myers said the new federal identity theft law, for example, pre-empted Oregon's tougher law protecting credit card numbers.

Both the state and federal version limit the number of digits of a credit card number that can be displayed on receipts from businesses. Such receipts are sometimes acquired by thieves and used to make fraudulent charges.

Myers said the federal law doesn't apply to the non-electronic card machines that make an imprint of card numbers, nor does it require receipts to be shredded once they are entered into a business's electronic record system.

Both requirements were in the state law.

We're seeing the reversal of the trend of the federal government setting the floor" for consumer protection standards and allowing states to adopt stricter laws, Myers said.

Critics of the federal identity theft law passed last fall protested that the legislation would stop states from setting separate tougher rules on use of credit data, for example.

But backers of the law, such as Rep. Barney Frank, D-Mass., said the trade-off was that most people in the country would have "much more in the way of consumer protection than they did before."

The federal Office of the Comptroller of the Currency adopted broad rules early this year that prevent most state consumer protection laws from applying to nationally chartered banks, the research report said.

Nationally chartered banks tend to be the biggest banks, such as Wells Fargo and U.S. Bank.

Oregon's chief banking regulator, Floyd Lanter, said if a customer has a complaint about a bank's ATM fees, for example, and it's a nationally chartered institution, the state often must tell them to send their gripe to the federal agency's consumer complaint office in Texas.

The comptrollers' office, in a Jan. 6 report justifying the new rules, said when national banks can't operate "under uniform, consistent and predictable standards, their business suffers, which negatively affects their safety and soundness" and "subjects them to uncertain liabilities."

Steve Dixon, spokesman for the research group, said the organization realizes national businesses don't want to deal with many different state regulations.

But he said states should have leeway to deal with their own circumstances and that federal pre-emption is all right if it only sets "a minimum level of regulation."'