Federal Pressmption of State Prepayment-Penalty Statutes: The OTS Reverses Itself
John C. Murray
FEDERAL State State State PROBATE & PROPERTY MAY/JUNE 2004 63 Under federal preemption principles and regulatiion promulgated by the Office of Thrift Supervision (OTS), federal savings associations can include prepayment penalty clauses in commercial loan documents and enforce such clauses according to their terms, regardless of any state law to the contrary. See 12 C.F.R. § 545.2 (2003) (federal regulations are “preempptiv of any state law purporting to address the subjeec of operations of a...