Fried Frank released the first of a series of annual reports on litigation involving financial institutions by Thomas P. Vartanian, Daniel E. Loeb, and Dominic A. Arni. The inaugural 2007 report focuses on the ability of federally chartered institutions and their subsidiaries to rely on federal preemption to defeat the enforcement of state laws against them. See Vartanian, Loeb, and Arni, 2007 Financial Institutions Litigation Update: Preemption Decisions a Key to Future Subprime Litigation?, Banking Report (BNA) 567 (March 24, 2008). The report explains how courts have limited the applicability of state laws with respect to federally chartered financial institutions and their subsidiaries and limited the claims that private parties may bring against such entities under state consumer protection laws.
Among other things, the authors suggest that the current instability in the financial markets could lead to even more attempts by states and third parties to assert rights that are based on state laws. As a result, federal preemption arguments may well be an increasingly powerful tool against such actions.
The March 2008 BNA article and our other articles are available on the Fried Frank website.
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