1. This article was presented at the Journal of Law and Religion's Symposium, The Global Economic Crisis, Law and the Religious Traditions (Oct. 15, 2009). An abbreviated version appeared in First Things' On the Square website, Subsidiarity and the Financial Crisis, at http://www.firstthings.corn/onthesquare/2009/04/subsidiarity-and-the-financial (last visited Mar. 3, 2010). I am grateful for the helpful comments I received on an early version of this article at a faculty colloquium at Notre Dame Law School, for thoughtful suggestions from Marie A. Failinger, Robert G. Kennedy, and Robert K. Vischer, and for the able research assistance of William Ashenmacher.

2. Benedict, Pope XVI, Caritas in Veritate (Ignatius 2009) [hereinafter Caritas]Google Scholar.

3. Shiller, Robert J.. The Subprtme Solution 8 (Princeton Univ. Press 2008)Google Scholar.

4. Economist Robert J. Schiller provides this pithy explanation for the proliferation of these instruments:

[The subprime] mortgage originators did not generally believe in their own products, and they wanted to dispose of them as quickly as possible. This in turn was made possible by concurrent sweeping changes in the way mortgages were originated and held. In the old days those who originated mortgages, such as the S&Ls, were also those who held them. But there has been a change in the market. Now only rarely do the originators of mortgages—whether mortgage brokers, banks, or other thrift institutions—continue to hold them. Instead the mortgages are sold; indeed, the returns from them are often repackaged in a variety of different ways. As part of this repackaging, the different tranches of the mortgage returns are often bundled together and sold in very different slices. Financial markets found that it was possible to sell mortgage parts—just as smart grocers had discovered that they could do a brisk business in chicken parts. The ultimate holders of these mortgages are far from the originators, and usually they have little incentive to look into the qualifications of any individual mortgages in their portfolios. They share the gains and the losses with a large number of other buyers.

But if the mortgages, or at least their riskier subprime tranches, carry very high risk, one may ask the natural question: who would buy them? It turns out that once the mortgages were put into packages, a financial miracle occurred. They were taken to rating agencies, who often put their stamp of approval on them. The subprime packages were in fact rated very highly-80% AAA and 95% A or higher. These ratings were in fact so high that they would be bought into by bank holding companies, money market funds, insurance companies, and sometimes even depository banks themselves that would never have touched any of these mortgages individually.

… [T]wo bits of magic enabled the rating agencies to accomplish this hat trick. They attached to the securities a very low expected loss rate due to default, about 6%. This probability of default was based on very recent data, from a period when housing prices had been rapidly rising. Even then the estimates of the expected loss in case of default were meager, between 10% and 20%.

Akerlof, George A. & Shiller, Robert J., Animal Spirits 36–37 (Princeton Univ. Press 2009)Google Scholar. See also Bhagwati, Jagdish, Feeble Critiques: Capitalism's Petty Detractors, 175 World Affairs 36, 43–44 (2009)Google Scholar.

5. Scott, Hal S., The Global Financial Crisis 168–72 (Found. Press 2009)Google Scholar; Andrews, Edmund L., Leaders of G-20 Vow to Reshape Global Economy, N.Y. Times, 09 20, 2009, at AlGoogle Scholar.

6. Caritas, supra note 2, at ¶ 67.

7. Id.

8. Id. at ¶ 66.

9. He writes:

Financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers. Right intention, transparency, and the search for positive results are mutually compatible and must never be detached from one another. If love is wise, it can find ways of working in accordance with provident and just expediency as is illustrated in a significant way by much of the experience of credit unions.

Id. at ¶ 65.

10. He writes:

Both the regulation of the financial sector, so as to safeguard weaker parties and discourage scandalous speculation, and experimentation with new forms of finance, designed to support development projects, are positive experiences that should be further explored and encouraged, highlighting the responsibility of the investor. Furthermore, the experience of microfinance … should be strengthened and fine-tuned. This is all the more necessary in these days when financial difficulties can become severe for many of the more vulnerable sectors of the population, who should be protected from the risk of usury and from despair. The weakest members of society should be helped to defend themselves against usury, just as poor peoples should be helped to derive real benefit from micro-credit, in order to discourage the exploitation that is possible in these two areas. Since rich countries are also experiencing new forms of poverty, micro-finance can give practical assistance by launching new initiatives and opening up new sectors for the benefit of the weaker elements in society, even at a time of general economic downturn. Id.

11. Id. He notes that microfinance has its genesis in pawn-broking: “… the experience of micro-finance, which has its roots in the thinking and activity of the civil humanists—I am thinking especially of the birth of pawnbroking—should be strengthened and fine-tuned.” Id. For a discussion of the history and continuing role of pawnshops in providing essential financial services to lower-income families, see Caskey, John P., Fringe Banking: Check-Cashing Outlets, Pawnshops, and the Poor (Russell Sage Found. 1994)Google Scholar. This discussion is updated in Caskey, John P., Fringe Banking and the Rise of Payday Lending, in Credit Markets for the Poor 17 (Bolton, Patrick & Rosenthal, Howard eds., Russell Sage Found. 2005)Google Scholar.

12. Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010) (to be codified in scattered sections of predominately 12 & 15 U.S.C.).

13. Caritas, supra note 2, at ¶ 41.

14. Id. at ¶ 57.

15. This section summarizes arguments developed in greater detail in Schiltz, Elizabeth R., Damming Warters: Channeling the Power of Federal Preemption of State Consumer Banking Laws, 35 Fla. St. U. L. Rev. 893 (2008)Google Scholar [hereinafter Damming Warters] and Schiltz, Elizabeth R., The Amazing, Elastic, Ever-Expanding Exportation Doctrine and its Effect on Predatory Lending Regulation, 88 Minn. L. Rev. 518 (2004)Google Scholar [hereinafter Exportation Doctrine].

16. See Schiltz, Exportation Doctrine, supra note 15, at 525-33.

17. National Bank Act, ch. 106, § 30, 13 Stat. 99, 108 (1864) (codified as amended at 12 U.S.C. § 85 (2000)).

18. Id.

19. Tiffany v. Nat'l Bank of Mo., 85 U.S. (18 Wall.) 409, at 413 (1873).

20. Marquette Nat'l Bank v. First of Omaha Serv. Corp., 439 U.S. 299, 301 (1978).

21. Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, 12 U.S.C. § 1811 (2000).

22. OCC Interpretative Letter No. 822, [1997-1998 Transfer Binder] Fed. Banking L. Rep. (CCH) ¶ 81, 265 (Feb. 17, 1998).

23. See Schiltz, Damming Warters, supra note 15, at 899-901.

24. Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735, 740 (1996) (quoting 61 Fed. Reg. 4869 (Feb. 9, 1996) (codified at 12 C.F.R. § 7.4001(a) (2007)).

25. Schiltz, Damming Watters, supra note 15, at 903.

26. 12 C.F.R. §§ 7.4007, 7.4008, 7.4009, 34.4 (2007).

27. Schiltz, Damming Watters, supra note 15, at 903-04.

28. These included laws governing contracts, torts, criminal law, homestead laws for real estate loans, rights to collect debts, acquisition and transfer of property, taxation, zoning, and “[a]ny other law the effect of which the OCC determines to be incidental to … or otherwise consistent with” the powers of national banks. 12 C.F.R. §§ 7.4007(c), 7.4008(e), 7.4009(c)(2), 34.4(b) (2007).

29. Bank Activities and Operations; Real Estate Lending and Appraisals, 69 Fed. Reg. 1904, 1907 (Jan. 13, 2004) (to be codified at 12 C.F.R. pts. 7 & 34) [hereinafter Final Preemption Rule].

30. Id. at 1907-08.

31. 12 C.F.R. § 7.4006 (2007).

32. Schiltz, Damming Watters, supra note 15, at 910-11.

33. In the same set of regulations, the OCC had also argued that even the exercise of visitorial powers by state officials, such as enforcement actions by state attorneys general, constituted impermissible encroachment on the reach of federal preemption of state laws. 12 C.F.R. § 7.4000 (2007). This position was rejected by the Supreme Court. Cuomo v. Clearing House Ass'n, 129 S.Ct. 2710, 2721-22 (2009).

34. Watters v. Wachovia Bank, N.A., 550 U.S. 1, 14 (2007) (citing Easton v. Iowa, 188 U.S. 220, 229 (1903)). For a more comprehensive discussion of the Court's analysis of this argument, see Schiltz, Damming Watters, supra note 15, at 910-16.

35. Id. at 20-21.

36. Pub. L. No. 111-24, 123 Stat. 1734 (2009) (relevant provisions codified at 15 U.S.C. §§ 1637(f), (j), and (n), 1665d, and 1666i-1).

37. The Bureau's mandate is “to implement and … enforce Federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and competitive.” Its objectives are to ensure that:

consumers are provided with “timely and understandable information to make responsible decisions about financial transactions”;

consumers are protected from unfair, deceptive, abusive or discriminatory practices; unwarranted regulatory burdens are reduced;

federal consumer financial laws are enforced consistently, regardless of the corporate status of the creditor; and

the “markets for consumer financial products and services operate transparently and efficiently to facilitate access and innovation.”

Dodd-Frank § 1021 (to be codified at 12 U.S.C. § 5511).

38. Dodd-Frank §§ 1002(12) & (14), 1022(a) (to be codified at 12 U.S.C. §§ 5481 & 5512). The Federal Trade Commission retains the rule-making authority it has under the Federal Trade Commission Act of 1914, 15 U.S.C. 41 et seq. Dodd-Frank § 1061 (to be codified at 12 U.S.C. § 5581). The Bureau's regulations may be set aside by the newly-established Financial Stability Oversight Council, but only if it finds that the regulation “would put the safety and soundness of the United States banking system or the stability of the financial system of the United States at risk.” Dodd-Frank § 1023(a) (to be codified at 12 U.S.C. § 5513(a)).

39. Dodd-Frank §§ 1024-26 (to be codified at 12 U.S.C. §§ 5514-16).

40. Dodd-Frank § 1026 (to be codified at 12 U.S.C. § 5516).

41. Dodd-Frank § 1027 (to be codified at 12 U.S.C. § 5517). Other types of entities, such as merchants and retailers in certain activities, licensed or registered real estate brokers, manufactured home retailers, accountants, tax preparers, lawyers, and car dealers, are also exempted from the Bureau's supervisory and enforcement authority. Id. & Dodd-Frank § 1029 (to be codified at 12 U.S.C. § 5519).

42. Dodd-Frank § 1031 (to be codified at 12 U.S.C. § 5531).

43. Dodd-Frank §§ 1400-1498 (to be codified in scattered sections of predominately 12 U.S.C. and 15 U.S.C).

44. Dodd-Frank § 1027(o) (to be codified at 12 U.S.C. § 5517(o)).

45. Dodd-Frank § 1041 (to be codified at 12 U.S.C. § 5551).

46. Dodd-Frank § 1046 (to be codified at 12 U.S.C. § 5565).

47. Kaper, Stacy, and Hopkins, Cheyenne, Preemption Gets Clipped by Conferees, Am. Banker, June 23, 2010, at 1.

48. Dodd-Frank § 1044(b)(1)(B) (to be codified at 12 U.S.C. § 25b).

49. 517 U.S. 25 (1996).

50. 156 Cong. Rec. S5902 (daily ed. July 15, 2010) (statements of Messrs. Dodd and Carper).

51. Bruce, R. Christian, Dodd-Frank Act's Language on Preemption Forces some Quick Decisions, Lawyers Say, 95 BNA's Banking Rep. 168, July 27, 2010.

52. Dodd-Frank §§ 1044(b)(3) & 1044(c) (to be codified at 12 U.S.C. § 25b). The OCC is also required to conduct periodic reviews of all preemption decisions, with public disclosures of its decisions to continue, rescind, or amend such decisions based on this review. Dodd-Frank § 1044(d) (to be codified at 12 U.S.C. § 25b).

53. Instead, courts reviewing OCC preemption determinations are directed to “assess the validity of such determinations, depending upon the thoroughness evident in the consideration of the agency, the validity of the reasoning of the agency, the consistency with other valid determinations made by the agency, and other factors which the court finds persuasive and relevant to its decision.” Dodd Frank § 1044(b)(5) (to be codified at 12 U.S.C. § 25b).

54. Dodd-Frank § 1042 (to be codified at 12 U.S.C. § 5552). Dodd-Frank also affirms the Supreme Court's ruling in Cuomo v. Clearing House Assn. See supra note 33, regarding the visitorial powers of state attorneys general. Dodd-Frank § 1047 (to be codified at 12 U.S.C. § 25b).

55. A major difference between this development in the U.S. and the E.U. is the authority to regulate one of the most fundamental aspects of consumer credit—the interest rate charged on a loan—is still firmly within the power of individual member states. None of the E.U. measures discussed infra suggest taking the authority to regulate interest rates away from Member States. However, as both the American and European experience show, there is much significant regulation of consumer credit beyond the numerical interest rates. See supra note 36 and accompanying text, and infra notes 69-84 and accompanying text.

56. The E.U. is a unique political system created through a series of treaties among twenty-seven nations in Europe (the “Member States’), pursuant to which various aspects of national sovereignty are ceded to the collective authority of the E.U. See http://europa.eu/abc/european_countries/eu_members/index_en.htm for list of current Member States. The Member States act collectively primarily through three different bodies: The Council of the European Union, consisting of the ministers from each of the Member States representing the interests of the Member States; the European Parliament, directly elected by and representing the people of the various Member States; and the European Commission, representing the common interests of the E.U. See Fontaine, Pascal, Europe in 12 Lessons 17–20 (B-1049 Brussels 2006), available at http://ec.europa.eu/publications/booklets/eu_glance/60/en.pdfGoogle Scholar.

57. Weatherill, Stephen, Eu Consumer Law and Policy 1 (Edward Elgar 2005)CrossRefGoogle Scholar (quoting Bourgoignie, T. & Trubek, D., Consumer Law, Common Markets and Federalism vi (De Gruyter 1987))Google Scholar.

58. Consolidated Version of The Treaty on European Union, art. 3, May 9, 2008, O.J. (C155) 1 (2008) [hereinafter “E.U. Treaty”].

59. Consolidated Version of The Treaty on the Functioning of the European Union, art. 114, Sept. 5, 2008, O. J. (C115) 94 (2008). (The E.U. “shall… adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market…”) [hereinafter “Tfeu”].

60. For a succinct description of the history of the E.U., including its origins in the desire to eliminate barriers to trade among its member states, see Fontaine, supra note 56. See also Head, Anthony S., The European Union: A Guide for Americans 5 (2009), available at http://eurunion.org/eu/images/PDF/euguide2009.pdfGoogle Scholar.

61. Bermann, George A., Taking Subsidiarity Seriously: Federalism in the European Community and the United States, 94 Colum. L. Rev. 346–47 (1994)CrossRefGoogle Scholar.

62. Tfeu, art. 5(3).

63. Id. at art. 169(1).

64. Id. at art. 169(2).

65. Id. at art. 169(4).

66. Weatherill, supra note 57, at 2.

67. Id.

68. Bertram, supra note 61, at 331, 355-57.

69. Council Directive 87/102, 1986 O.J. (L 42) (EC).

70. Id. at arts. 7-11.

71. Id. at arts. 12-14.

72. Id. at art. 15.

73. Weatherill, supra note 57, at 4. See also Bradley, Caroline, Fifty Years of European Community Law: Part I: Consumers of Financial Services and Multi-Level Regulation in the European Union, 31 Fordham Int'L LJ. 1212, 1212–14 (2008)Google Scholar.

74. Council Directive 2008/48, 2008 O.J. (L 133) (EC).

75. Micklitz, Hans-W., Reich, Norbert, Rott, Peter, Understanding eu Consumer Law 38–34 (Intersentia 2009)Google Scholar.

76. Id.

77. Id.

78. Directive 2008/48/EC, O.J. (L 207) (EC) Preamble ¶ (9). The Directive explains: Member States may, for instance, maintain or introduce national provisions on joint and several liability of the seller or the service provider and the creditor. Another example of this possibility for Member States could be the maintenance or introduction of national provisions on the cancellation of a contract for the sale of goods or supply of services if the consumer exercises his right of withdrawal from the credit agreement. In this respect Member States, in the case of open-end credit agreements, should be allowed to fix a minimum period needing to elapse between the time when the creditor asks for reimbursement and the day on which the credit has to be reimbursed.

Id. See also ¶ 10, 22, 30, 35, 36, 38, & 42.

79. Proposal for a Directive of the European Parliament and of the Council on Consumer Rights, COM (2008) 614 final, (Aug. 10, 2008) [hereinafter Proposed Directive].

80. Council Directive 1993/13, 1993 O.J. (L 95) (EC).

81. Council Directive 1985/577, 1985 O.J. (L 372) (EC).

82. Council Directive 1997/7, O.J. (L 144) (EC).

83. Council Directive 1999/44, O.J. (L 171) (EC).

84. Proposed Directive, supra note 79, art. 4. (“Member States may not maintain or introduce, in their national law, provisions diverging from those laid down in this Directive, including more or less stringent provisions to ensure a different level of consumer protection.”).

85. Id. at Preamble, ¶ 11.

86. Id. at Preamble, ¶¶ 4-8.

87. See, e.g., Smits, Jan M., Full Harmonisation Of Consumer Law? Critique Of The Draft Directive On Consumer Rights (2009), available at http://papers.ssrn.com/sol3/papers.cfrn?abstract_id=1358426 (last visited Mar. 20, 2010)Google Scholar; van Boom, Willem H., The Draft Directive on Consumer Rights: Choices Made and Arguments Used (2009), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1411664 (last visited Mar. 20, 2010)Google Scholar.

88. As the Congressional Oversight Panel points out, “states first sounded the alarm against predatory lending and brought landmark enforcement actions against some of the biggest subprime lenders, including Household, Beneficial Finance, AmeriQuest, and Delta Funding.” Congressional Oversight Panel, Special Report on Regulatory Reform 32–33 (2009)Google Scholar. Some of the most fiercely fought battles in the preemption wars were over attempts of states such as North Carolina and Georgia to enforce state statutes that would have substantively regulated subprime mortgage lending. See McCoy, Patricia A., Pavlov, Audrey D. & Wachter, Susan M., Systemic Risk Through Securitization: The Result of Deregulation and Regulatory Failure, 41 Conn. L. Rev. 1327, 1348–52 (2009)Google Scholar.

89. Paul, VI, Populomum Progressio (Assoc. for Int'l Dev. 1967) [hereinafter Populorum]Google Scholar.

90. Deck, Allan Figueroa, Commentary on Populorum progressio, in Modern Catholic Social Teaching: Commentaries and Interpretations 292 (Himes, Kenneth R., Cahill, Lisa Sowieet al. eds., Georgetown Univ. Press 2005)Google Scholar.

91. Caritas, supra note 2, at ¶ 11.

92. Id. at ¶ 15.

93. Id. at ¶ 16.

94. Id. at ¶ 19.

95. Id. at ¶ 21.

96. Caritas, supra note 2, at ¶ 24.

97. Id.

98. Id. at ¶ 34.

99. Id.

100. Id. at ¶ 2.

101. Caritas, supra note 2, at ¶ 35.

102. Id.

103. Id. at ¶ 34.

104. Id. at ¶ 35.

105. Id. at ¶ 37.

106. Caritas, supra note 2, at ¶ 36.

The great challenge before us, accentuated by the problems of development in this global era and made even more urgent by the economic and financial crisis, is to demonstrate, in thinking and behavior, not only that traditional principles of social ethics like transparency, honesty and responsibility cannot be ignored or attenuated, but also that in commercial relationships the principle of gratuitousness and the logic of gift as an expression of fraternity can and must find their place within normal economic activity. This is a human demand at the present time, but it is also demanded by economic logic. It is a demand both of charity and of truth.

107. Id. at ¶ 37.

108. Id. at ¶ 38.

109. Id. at ¶ 39.

110. Id at ¶ 41.

111. Caritas, supra note 2, at ¶ 39.

112. Id. at ¶ 41.

113. Id.

114. Id. (emphasis added).

115. Pontifical Council for Justice and Peace, Compendium of the Social Doctrine of the Church ¶ 185 (USCCB Publ'g 2004) [hereinafter Compendium]Google Scholar.

116. The Compendium notes that the encyclical Quadragesimo Anno indicates the principle of subsidiarity as “a most important principle of ‘social philosophy,’” and quotes that encyclical's description of the principle:

Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help to members of the body social, and never destroy and absorb them.

Id. at ¶ 186, quoting Pius XI, Encyclical Letter Quadragesimo Anno 203 (1931)Google Scholar.

117. Caritas, supra note 2, at ¶ 57.

118. Id. at 157.

119. Id.

120. Id.

121. Id. at ¶ 58.

122. Caritas, supra note 2, at ¶ 39.

123. See, e.g., Mason, Joseph R. & Singer, Hal J., The Economic Impact of Eliminating Preemption of State Consumer Protection Laws, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1476318 (last visited Mar. 20, 2010)Google Scholar.

124. Id. at ¶ 33. See also supra notes 89-93 and accompanying text.

125. Farrow, Douglas, Charity and Unity, First Things, 10 2009, at 37, 38Google Scholar.

126. Shiller, the Subprime Solution, supra note 3, at 23 (“Although the subject comes up only rarely in the public discourse on the current financial crisis, the advent of subprime mortgages during the 1990s reflected a start, albeit primitive, toward extending the benefits of financial innovation to more and more people-in other words, toward democratizing finance.”); see also, generally, Phelps, Edmund, Economic Justice and the Spirit of Innovation, First Things, 10 2009, at 27Google Scholar; Bhagwati, supra note 4.

127. Caritas, supra note 2, at ¶ 33.

128. Id. at ¶ 71.

129. Caritas, supra note 2, at ¶ 45.

130. See International Law Development Organization, http://www.idlo.int/english/About%20Us/Pages/Home.aspx (last visited May 6, 2010).

131. See International Development Law Organization, Microfinance Law and Regulation, http://www.idlo.int/Microfinance/english/external/MicroHome.asp (last visited March 3, 2010)Google Scholar.

132. Id. at ¶ 57.

133. See supra notes 115-17 and accompanying text.

134. Pope Pius XI expressly applied this principle to the social order with the following language:

Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help to members of the body social, and never destroy and absorb them.

Pius XI, Encyclical Letter Quadragesimo Anno 203 (1931)Google Scholar.

135. Bermann, supra note 61.

136. Bermann, supra note 61, at 340; see also Scruton, Roger, The Journey Home, 44 Intercollegiate Rev. 31, 33–34 (2009)Google Scholar.

137. E.U. Treaty, art. 5; see also Protocol on the Application of the Principles of Subsidiarity and Proportionality, Treaty of Lisbon, Dec. 17, 2007, O.J. (C306) 150 (2007) (setting out the procedures for ensuring that the detailed analysis of the application of the principle of subsidiarity is included with any proposed EU legislation).

138. Bermann, supra note 61, at 402.

139. Professor Miller has famously characterized one context for such a federalism argument, the continuation of the dual system of national and state bank charters, see infra notes 146 & 154 and accompanying text, as “a sacred cow in the American political tradition.” Miller, Geoffrey P., The Future of the Dual Banking System, 53 Brook. L. Rev. 1, 1 (1987)Google Scholar.

140. Bermann, supra note 61, at 342.

141. Indeed, the last of these values was rejected by the Supreme Court as determinative in the regulation of consumer credit in rejecting the Tenth Amendment arguments in Watters, Watters, 550 U.S. at 21.

142. Scruton, supra note 136, at 35.

143. Raskin, Sarah Bloom, Proposed CFPA Must Partner with States to Be Successful, Lombard St., 09 14, 2009, at 14Google Scholar.

144. Id. For other examples of this type of argument, see also Davis, Delvin M. & Schloemer, Ellen, Center for Responsible Lending, Strong Compliance Systems Support Profitable Lending While Reducing Predatory Practices, Center for Responsible Lending Issue Paper No. 10 (07 26, 2005), available at http://www.responsiblelending.org/mortgage-lending/research-analysis/ip010-Compliance_Costs-0705.pdf (last visited Mar. 3, 2010)Google Scholar; Pitkin, Howard, Regulatory Reform and the Timeless Value of Federalism, Lombard St., 11 30, 2009, at 25Google Scholar; Zywicki, Todd J., Testimony Before U. S. House of Representatives Committee on Financial Services on Proposed Consumer Financial Protection Agency (07 15, 2009), available at http://ssrn.com/abstract_id=1459085 (last visited Mar. 18, 2010)Google Scholar.

145. Childs, Christopher R., Comment: So You've Been Preempted-What Are You Going to Do Now?: Solutions for States Following Federal Preemption of State Predatory Lending Statutes, 2004 Byu L. Rev. 701, 720–21 (footnotes omitted)Google Scholar.

146. See my extensive discussion of this argument in Schiltz, Damming Watters, supra note 15, at 932-39, and sources cited therein.

147. Ayadi, Rym, Et Al., Investigating Diversity in the Banking Sector in Europe: The Performance and Role of Savings Banks (CEPS Paperbacks 2009), available at http://ssrn.com/abstract=1427753Google Scholar.

148. The authors identify Spain, Germany and Austria as countries in which savings banks still play an important role, and Belgium, Italy, and the United Kingdom as countries in which savings banks have actually or virtually disappeared. Id. at 6.

149. Id. at 14.

150. Id. at iii.

151. Rym Ayadi, Et Al., supra note 147, at 36-37.

152. Id. at 15-20.

153. Id. at 50, 186-87.

154. Schiltz, Damming Watters, supra note 15, at 935-36; see also Pitken, supra note 144, at 27.

155. Rym Ayadi, ET AL., supra note 147, at 27. The benefits of the innovations fostered by regulatory competition are often used to justify the dual banking system in the U.S., as well. See Damming Watters, supra note 15, at 935-36.

156. Indeed, state banking regulators who defend the need for strong state authority also invariably acknowledge the value of uniform, nationwide federal action when local problems spread across the nation. See Raskin, supra note 143 (Commissioner, Maryland Office of Financial Institutions) and Pitkin, supra note 144 (Commissioner, Connecticut Department of Banking).