¶ 1 M & I Marshall & Ilsley Bank appeals a circuit court order dismissing M & I's state law claims on federal preemption grounds. M & I's state law claims sought to reverse an exchange of shares of stock between defendant Guaranty Bank and defendant GB REIT on the grounds that the stock exchange amounted to fraudulent transfer and conversion of M & I assets pledged as collateral for a loan made by M & I to the defendant entities.
¶ 2 Preemption became an issue because a federal regulatory agency directed the exchange of stock that M & I challenges in this action. The federal directives required the defendants to make the exchange for the purpose of increasing the capitalization of Guaranty Bank. The circuit court concluded that this law suit, in which M & I seeks to reverse the exchange, is preempted by the directives.
¶ 3 M & I acknowledges that relief it seeks, including an order that would void the stock exchange, would directly conflict
¶ 4 We conclude that the agency directives were not invalid due to the alleged condition precedent in the REIT's certificate of incorporation, that the federal regulation at issue created preemptive authority for the directives, and that the directives carried the force of federal law relevant for preemption purposes. Accordingly, we affirm the circuit court's order dismissing the complaint on preemption grounds, and do not reach additional arguments made by the defendants for dismissal of M & I's complaint.
STANDARD OF REVIEW
¶ 5 "A motion to dismiss a complaint for failure to state a claim tests the legal sufficiency of the complaint." Watts v. Watts, 137 Wis.2d 506, 512, 405 N.W.2d 303 (1987). This presents a question of law for our independent review. Wausau Tile, Inc. v. County Concrete Corp., 226 Wis.2d 235, 245, 593 N.W.2d 445 (1999). We accept facts alleged in the complaint as true, drawing from those facts all reasonable inferences favoring a claim. Meyer v. Laser Vision Inst., LLC, 2006 WI App 70, ¶ 3, 290 Wis.2d 764, 714 N.W.2d 223. "A complaint should not be dismissed for failure to state a claim unless it appears certain that no relief can be granted under any set of facts that a plaintiff can prove in support of [the] allegations." Watts, 137 Wis.2d at 512, 405 N.W.2d 303.
¶ 6 The following rule regarding attachments to complaints is also relevant:
¶ 7 Thus, our factual summary and the discussion that follows are limited to consideration of: (1) allegations of fact contained in M & I's complaint; (2) allegations of fact reflected in exhibits attached to the complaint; and (3) all reasonable inferences arising from these allegations supporting M & I's claims, so long as an allegation in the complaint is not contradicted by the terms of an exhibit attached to the complaint.
M & I Loan to MHC Secured by REIT Stock
¶ 8 Under a March 30, 1998, loan agreement and its subsequent amendments, M & I loaned, over time, a total of $50 million to Guaranty Financial, MHC (MHC), then a Wisconsin mutual savings bank. As collateral security for its obligations under the loan agreement, MHC pledged 50,000 shares of preferred stock of the GB REIT
¶ 9 As M & I provided loan proceeds under the agreement, the defendants used the proceeds to purchase the REIT preferred stock, and then pledged to M & I as collateral this REIT stock, transferring certificates for one share of the REIT stock for each $1,000 of principal loan balance, because the liquidation value of each share of REIT stock was $1,000. In this way, the defendants granted to M & I a lien on the pledged REIT preferred shares having a total liquidation value of $50 million.
Automatic Exchange Provisions
¶ 10 The REIT preferred shares purchased with the loan proceeds that served as collateral, as described above, were subject to a potential "automatic exchange" of shares. Pursuant to provisions of the REIT certificate of incorporation filed with the State of Delaware,
The Exchange Event would occur in the following manner. Each holder of the REIT preferred stock would be obligated to surrender to Guaranty Bank the certificates representing each share of the holder's REIT preferred stock, and Guaranty Bank would be obligated to issue in exchange, on a one-to-one ratio, shares of Guaranty Bank's preferred stock.
Guaranty Bank Converts to Federal Savings Bank Status
¶ 11 Federal preemption arises as an issue in this case because in 2002, MHC and Guaranty Bank converted to federal charters, although details of the conversions are not a focus of this appeal. M & I consented to these conversions in an amendment to the loan agreement. Guaranty Bank became a federal "thrift institution" by surrendering its Wisconsin charter in exchange for a federal stock saving bank charter, and MHC, as a federal mutual holding company, became the parent company of Guaranty Financial Corp., which was the parent of Guaranty Bank.
OTS Issues Cease and Desist Orders; M & I Demand
¶ 12 On March 11, 2009, the Office of Thrift Supervision (OTS), the federal agency with regulatory authority over federal savings banks, issued orders directing MHC, Guaranty Financial Corp., and Guaranty Bank to cease and desist from certain actions and to undertake other actions to address "diminished capital levels, poor earnings, [a] high level of classified assets, and inadequate policies and procedures."
¶ 13 These cease and desist orders constituted default events under the M & I loan agreement. In a separate default event under the loan agreement, MHC failed to make its March 31, 2009, quarterly interest payment on the loan to M & I. Citing these defaults, on April 6, 2009, M & I demanded repayment of the $50 million in loan proceeds that it was owed, and informed MHC that it intended to sell, in one or more private sales, the 50,000 shares of GB REIT preferred stock pledged as security under the loan.
OTS Issues Directive for Automatic Exchange
¶ 14 On April 24, 2009, OTS issued two similarly worded directives, one to Guaranty Bank and the other to the REIT. The texts of the directives are recited in full in the discussion below in ¶¶ 56, 57. They directed the defendants to make the automatic exchange of the REIT preferred shares for Guaranty Bank preferred shares, because OTS "anticipates the Bank becoming `undercapitalized' under Prompt Corrective Action regulations, 12 C.F.R. Part 565, in the near term." OTS directed: "The Automatic Exchange shall be effective at 8:00 a.m. Milwaukee time on Tuesday, April 28, 2009."
¶ 15 The defendants made the exchange on April 28, 2009, and Guaranty Bank notified M & I that, pursuant to direction from OTS, Guaranty Bank was dissolving and liquidating both the REIT and GBRC Holding Company, so that all assets of the REIT and GBRC were distributed to Guaranty Bank.
M & I's State Law Claims
¶ 16 M & I alleges that at the time of the automatic exchange, the REIT's assets were worth more than $62 million, and its preferred stock had a liquidation value of $1,000 per share. In contrast, M & I alleges, the Guaranty Bank preferred stock was of little or no value, and therefore the automatic exchange had the effect of depriving M & I of approximately $50 million. More specifically, M & I alleges that the automatic exchange was a fraudulent transfer under both Wis. STAT. §§ 242.04(1)(b) and 242.05(1) (2009-10). M & I's conversion claim is that the defendants "took, and caused to cease to exist, 50,000 shares of GB REIT Preferred Stock in which M & I had a valid, fully perfected first priority security interest."
Circuit Court Decision
¶ 17 The circuit court granted the defendants' motion to dismiss both the fraudulent transfer and conversion claims on the grounds that the relief sought by M & I directly conflicts with the goal of the OTS directives to make the automatic stock exchange,
Regulation by OTS
¶ 18 As final background for our discussion, we briefly describe the specific federal statutory and regulatory framework at issue.
¶ 19 When Congress enacted the Home Owners' Loan Act of 1933 (HOLA), now found at 12 U.S.C. § 1461-70 (2009),
¶ 20 We first summarize the basic law of preemption, and then address M & I's arguments that preemption does not apply in this case.
A. Preemption Law
¶ 21 "[S]tate law that conflicts with federal law is `without effect,'" under the Supremacy Clause of the United States Constitution, U.S. CONST. art. VI, cl. 2. Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992) (citation omitted). "Federal preemption of a matter deprives a state court of subject matter jurisdiction." Dykema v. Volkswagenwerk AG, 189 Wis.2d 206, 210, 525 N.W.2d 754 (Ct.App. 1994). The preemptive effect of a federal law generally presents a question of law. See Miller Brewing Co. v. DILHR, 210 Wis.2d 26, 33, 563 N.W.2d 460 (1997).
¶ 22 While Congress has authority to preempt state law, "analysis of preemption claims begins with the presumption that `Congress does not intend to
¶ 23 Federal preemption of state laws occurs in three circumstances: (1) Congress explicitly states its intention to preempt state law; (2) a federal statutory or regulatory scheme shows intent to occupy the field to the exclusion of state law; (3) operation of state and federal law actually conflict. English v. General Elec. Co., 496 U.S. 72, 78-79, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990); Miezin, 284 Wis.2d 428, ¶ 10, 701 N.W.2d 626 (summarized as express preemption, implied field preemption, and implied conflict preemption).
¶ 24 Preemption is not limited to the effect of federal statutes, but also can be created by federal regulations promulgated by federal agencies. The supremacy clause gives Congress authority not only to enact legislation that expressly or has the effect of preempting state law, but also to delegate the same authority to an executive agency. Fidelity Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153-54, 102 S.Ct. 3014, 73 L.Ed.2d 664 (1982); see also Time Warner Cable v. Doyle, 66 F.3d 867, 875-76 (7th Cir.1995) (agency may preempt state law through regulations within scope of its delegated authority, so long as agency action not arbitrary).
¶ 25 The parties in this case agree, and the circuit court below concluded, that what is at issue here is implied
¶ 26 Turning to M & I's arguments against preemption here, as mentioned above M & I does not dispute that the remedies it seeks would reverse the automatic stock exchange directed by OTS. That is, M & I acknowledges that the defendants could not have complied with the OTS directives without engaging in the conduct that M & I alleges constituted fraudulent transfer and conversion.
¶ 27 Further, M & I does not challenge the broad authority of OTS to take formal actions related to the activities of the defendants, at the time it issued the challenged directives, that would have preemptive power. Instead, M & I makes narrow arguments that rest in part on the notion that OTS was operating under a "misapprehension" about what it could accomplish at the time it issued the directives.
¶ 28 First, M & I points to an alleged unfulfilled condition precedent in the REIT certificate of incorporation. We address this contention in Section B. below. Second, M & I challenges both the authority of OTS to issue the directives and the preemptive force of the directives. We address these two contentions in Section C. below.
B. Authority for the Stock Exchange under the REIT Certificate of Incorporation
¶ 29 M & I argues that there could be no preemption based on the OTS directives, because the exchange was not authorized under Section 4.1(d)(1) of the REIT certificate of incorporation. Under this view, alleged in M & I's complaint, Section 4.1(d)(1) contains an "express condition precedent" requiring that Guaranty Bank file with the State of Wisconsin a certificate of designation establishing its preferred shares on or before March 31, 1998, in order to trigger the potential for the exchange. M & I argues that by allegedly waiting more than two months, until June 5, 1998, to file amended and restated articles of incorporation establishing its preferred stock, Guaranty Bank violated a necessary precondition to the automatic exchange, and therefore the exchange was not an option at the time OTS issued its directives. This argument does not address the preemptive authority of OTS. Instead, M & I asserts that under the governing documents the exchange was simply not possible at the time OTS directed that it occur.
¶ 30 We assume without deciding that, if the automatic exchange was not possible when OTS purported to trigger it, then the OTS directives in themselves lacked preemptive effect. However, for the following reasons we conclude that, under the only reasonable construction of Section 4.1(d)(1), when read properly in the context of the terms of the loan agreement, Section 4.1(d)(1) did not prohibit the exchange as M & I asserts.
¶ 32 M & I focuses narrowly on the phrase "if on or prior to March 31, 1998, the Bank shall have filed," which M & I submits means that an automatic exchange may never occur unless Guaranty Bank filed its certificate of designation by that date, absent an amendment to REIT's certificate of incorporation focused on this alleged condition precedent.
¶ 33 However, we conclude that, when read in its entirety and in the context of the loan agreement with which the REIT incorporation is associated, Section 4.1(d) has only one reasonable interpretation, namely that the exchange may occur, after March 31, 1998, but only after the certificate of designation is first filed with the state.
¶ 34 We look first at the terms of Section 4.1(d) itself, and then turn to its meaning in the context of the loan agreement. Read as a whole, Section 4.1(d) establishes that the exchange may not occur until after the filing of the certificate of designation establishing the Guaranty Bank preferred shares, which is anticipated to occur on or around March 31, 1998. The second sentence of Section 4.1(d), and in particular its final phrase, "or if a Certificate of Designation is not so filed," makes sense only if the date, March 31, 1998, is viewed as a marker for ongoing activity, not as a "drop dead" deadline for the filing of the certificate if the exchange is ever to occur.
¶ 35 It is true that the phrase "if on or prior to March 31, 1998," if read in complete isolation, suggests a condition precedent. However, courts and parties are not to interpret phrases in texts in complete isolation. M & I advances only one alternative interpretation, the express condition precedent interpretation, and it is untenable as discussed above.
¶ 36 The defendants' construction of Section 4.1(d) is further supported by M & I's concession on appeal that, under the terms of the certificate of incorporation, the REIT continuously had authority to amend that document until the time the REIT was dissolved. Therefore, the REIT could have, at any time up to the time of the OTS directives, excused Guaranty Bank's allegedly tardy filing of the certificate of designation and permitted the automatic exchange. It is not a tenable interpretation of Section 4.1(d)(1) that the REIT barred itself from reliance on the critical exchangeability feature in the event of the tardy filing of the certificate of designation, even though the REIT could retroactively deem the filing to be "not tardy" at any time. There would have been no point to creating such a condition precedent.
¶ 37 Turning to the loan agreement, three aspects of the agreement support our interpretation of Section 4.1(d) as the
¶ 38 Second, a central feature of the loan agreement was that Guaranty Bank could count the REIT preferred stock in its bank capital through the potential for the stock exchange. This conversion feature was integral to the transaction. As M & I acknowledges on appeal, by its terms the loan agreement establishes that a primary purpose of incorporating the REIT was to effectuate the loan agreement, so that the real estate investment trust could generate returns from the $50 million loan. Further, M & I acknowledges on appeal that the automatic exchange was a required feature of the loan agreement, under federal regulations, from the inception of the REIT and the loan agreement.
¶ 39 For these reasons, it would have run directly counter to a primary goal of the parties—ensuring that Guaranty Bank could, if necessary, count the preferred stock in its bank capital through availability of the automatic exchange—for the REIT's own certificate of incorporation to easily destroy this essential purpose. That is to say, in light of the structure of the loan transaction, it would have made no sense to have placed the exchange in easy jeopardy through a condition precedent requiring designation of the Guaranty Bank preferred shares by March 31, 1998, and not one day later. The certificate had to be filed before the exchange could occur, and all parties were aware that the exchange needed to be available promptly, because the transaction depended in part on the exchangeability feature. Guaranty Bank was at risk of significantly overstating its capital each day that the exchangeability feature was not in place.
¶ 40 A third relevant aspect of the loan agreement is that neither it nor the REIT certificate of incorporation contains other
¶ 41 For all of these reasons, we conclude that Section 4.1(d) cannot be reasonably interpreted to mean that OTS was barred from triggering the automatic exchange in April 2009 because of the alleged failure of Guaranty Bank to have filed documents designating the REIT preferred stock before March 31, 1998. Therefore, the OTS directives were not invalid on the basis of the condition precedent alleged by M & I.
C. OTS Directives as Valid, Formal Federal Agency Action
¶ 42 M & I contends that the OTS directives were not valid, formal actions carrying preemptive authority for two reasons. First, M & I argues that the federal regulation on which OTS could base its preemptive authority in this context, 12 C.F.R. § 545.2, creates preemptive power only for actions of OTS related to savings association "operations" not at issue in this case. Second, M & I argues that the directives were merely informal and unenforceable, and therefore without preemptive authority. We address these contentions in turn.
¶ 43 M & I argues that the circuit court "erroneously ignored" the presumption against preemption in making its preemption decision in this case. However, our review of the record reflects conscientious consideration by the circuit court of the factual and legal issues presented to it by the parties, and in any case our review of this legal issue is de novo. For the following reasons, even applying the presumption against preemption, as we do, there is a clear and direct conflict between the authorized operation of federal law and this state court action.
1. 12 C.F.R. § 545.2: "Operations"
¶ 44 As referenced above at ¶ 19 & n. 7, it is beyond dispute that Congress delegated to the OTS exceedingly broad authority to regulate federal savings banks. OTS has summarized this delegation in 12 C.F.R. § 557.11:
¶ 45 The two sides in this appeal disagree about whether OTS in this case acted pursuant to a regulation promulgated under the broad statutory authority that preempts state law. M & I points out that OTS has issued regulations addressing preemption that vary to some degree by subject matter, and then, within each subject matter, carve out types of actions not subject to preemption. From this M & I argues that the OTS directives do not fall within an area for which the OTS regulations claim preemptive authority. We conclude that, even applying the presumption against preemption, the action OTS took here in directly addressing the solvency of Guaranty Bank, using the very tool contemplated by the parties to address capitalization concerns, had preemptive authority under the applicable regulation.
¶ 46 The parties agree that the most relevant OTS regulation is one addressing preemption related to the "operations" of federal savings associations, 12 C.F.R. § 545.2:
¶ 47 M & I argues that the word "operations" in 12 C.F.R. § 545.2 refers only to specific functions of federal savings associations addressed in Part 545, which are narrowly defined.
¶ 48 A similar argument to the one M & I now makes was advanced and rejected in Wisconsin League of Financial Institutions, Ltd. v. Galecki, 707 F.Supp. 401 (W.D.Wis.1989). In that case, federal savings institutions brought a declaratory judgment action against state officials, seeking to bar application of a new Wisconsin law regulating tax escrow accounts associated with mortgage loans administered by the plaintiffs and requiring certain disclosures. Id. at 402. The plaintiffs argued that their handling of escrow accounts and loan disclosures was exclusively regulated under the supervision of the Bank Board (which, as explained above, was a predecessor agency of OTS) under the same statutory authority at issue in the instant appeal. See id. at 404-05. Addressing 12 C.F.R. § 545.2, the court stated,
Id. at 405.
¶ 49 We find Galecki persuasive on this point. The term "operations" is not defined in 12 C.F.R. § 545, as one would expect if the preemptive authority expressed in 12 C.F.R. § 545.2 were limited to specific functions. As the court in Galecki suggests, § 545 is not written as though it were describing particular functions as "operations" for purposes of preemption. Indeed, a number of the functions listed by M & I as examples are not explicitly identified as "operations," making it difficult to consistently interpret § 545 as M & I suggests. See, e.g., 12 C.F.R. § 545.93 ("Application and notice requirements for branch and home offices") (making no use of the term "operation").
¶ 51 As to 12 C.F.R. § 560.2, that provision explicitly addresses "lending and investment" functions, which are not at issue in this case. It is true that the "lending and investment" preemption provision is broad and detailed, but M & I fails to persuade us that the agency has not created, in 12 C.F.R. §§ 545.2 and 560.2, two separate and broad preemption provisions addressing two sets of savings bank functions. It would be coherent and rational for the agency to have determined that both the "operations" and "lending and investment" preemptive sections should be broad to the point where they might have some overlapping effect, in that they preempt the operation of states' laws relating to some of the same savings bank functions.
¶ 52 Further, we need not determine the outer limits of the preemptive authority provided by 12 C.F.R. § 545.2 in order to conclude that the directives at issue in this case unquestionably involved core "operations" of Guaranty Bank. As foreshadowed in the March 2009 OTS cease and desist orders warning of diminished capital levels and poor earnings, the April 2009 OTS directives cited impending undercapitalization, a trend that could readily affect each and every "operation" of the savings bank, however defined, because it involved the continued viability of the institution as a whole.
¶ 53 M & I cites California state court decisions for the proposition that state law tort and consumer protection actions have been found not to be preempted under 12 C.F.R. § 545.2. See, e.g., Fenning v. Glenfed, 40 Cal.App.4th 1285, 47 Cal.Rptr.2d 715 (1995). However, those cases are readily distinguishable from this case, and therefore are of no persuasive value. These cases do not involve direct state law challenges to actions of Federal bank regulators, as this case does. In Fenning, for example, the plaintiffs alleged fraud, negligent misrepresentation, and unfair and deceptive business practices by a bank in allegedly blurring the distinction between securities offered for sale by the bank and those offered for sale by a brokerage firm. Id. at 1289-90, 47 Cal.Rptr.2d 715. Fenning favorably cited Galecki, and stated that the preemption question is "whether the causes of action alleged in the complaint `purport to address the subject of the operations' of the Bank." Fenning, 40 Cal.App.4th at 1296, 47 Cal.Rptr.2d 715. The conclusion of the California court that the variety of consumer fraud at issue in that case is not preempted does not add to the analysis in this starkly different circumstance, and its citation to Galecki as the correct standard supports the defendants' position.
¶ 54 For these reasons, we conclude that 12 C.F.R. § 545.2 provided a basis for OTS to exercise its preemptive authority in issuing the directives.
2. Enforceability of Directives
¶ 55 M & I argues that preemption is inappropriate because the OTS directives did not constitute formal, enforceable orders. That is, M & I contends that they were merely informal supervisory directives that did not compel compliance by
¶ 56 Each directive was formatted as a letter with the subject line, "Directive to Exchange Preferred Stock." The directive to the REIT stated as follows:
¶ 57 The directive to Guaranty Bank opened as follows (with the balance of the text tracking exactly the same language used in the directive sent to the REIT):
¶ 58 We first address a reference in the directives that is central to the arguments of the parties, namely the statement that OTS "anticipates the Bank becoming `undercapitalized' under Prompt Corrective Action regulations, 12 C.F.R. Part 565, in the near term." This was notification that OTS, following up on the cease and desist orders,
¶ 59 M & I argues that the directives themselves were not prompt corrective actions, or any other formal enforcement action, as defined in a 2008 regulatory bulletin of OTS, called an "examination handbook."
¶ 60 As authority for its position, M & I cites only cases repeating propositions, not contested in this appeal, that preemptive authority must rest on federal law, not law derived from other sources (such as contract terms), and on an actual conflict between state law and a valid federal statutory scheme.
¶ 61 We do not agree with M & I that the OTS guidance materials provide a basis for concluding that OTS selected an improperly formatted or procedurally defective vehicle to accomplish its unambiguous objective. OTS gave unambiguous direction, which was mandatory on its face, to parties who were "unconditionally obligated," under the terms of Section 4.1(d) of the REIT certificate of incorporation, to follow that direction. There can be no doubt that OTS intended to, and did, use the directives to give precise directions constituting an "Exchange Event" under the terms of § 4.1(d)(2), which requires only that the agency "directs in writing" for the exchange to occur. Section 4.1(d)(4) provides that upon such an "Exchange Event," the exchange "shall occur as of 8:00 a.m. Eastern Time on the date for such exchange set forth in the Directive." M & I does not provide us with legal authority suggesting that, in the preemption context, we should not follow the general rule that courts defer to administrative agency decisions properly delegated to the agency and made based on the agency's expertise in the interests of uniformity and consistency. See Harnischfeger Corp. v. LIRC, 196 Wis.2d 650, 660-62, 539 N.W.2d 98 (1995).
¶ 62 We see no reason that we should be less deferential in the preemption context, because as a general matter preemption is determined by the intent of Congress to displace or trump the operation of state law, not by the particular modes by which federal officials execute the federal laws. See Olstad v. Microsoft Corp., 2005 WI 121, ¶ 38, 284 Wis.2d 224, 700 N.W.2d 139 ("state laws must yield to the federal law" when Congress expressly or impliedly preempts "contradictory—or even coterminous—state laws"). A state law is preempted when it "frustrates the purpose of . . . national legislation, or impairs the efficiencies of . . . agencies of the federal government to discharge the[ir] duties," McClellan v. Chipman, 164 U.S. 347, 357, 17 S.Ct. 85, 41 L.Ed. 461 (1896), whether or not that purpose or those efficiencies are expressed in the precise form of an enforceable order.
¶ 63 Thus, for example, the defendants point to persuasive authority in the form of a federal district court opinion holding that a state court fraudulent conveyance claim challenging the purchase of assets from an institution regulated by the Federal Savings and Loan Insurance Corporation (FSLIC)
¶ 64 M & I seeks to distinguish this persuasive authority on the grounds that the FSLIC actions at issue there related to its capacity as a receiver, whereas in this case OTS was not directly exercising authority over assets of a regulated entity. However, this distinction is not significant as it relates to the preemption question at issue here, namely whether the OTS directives lacked preemptive force because they were apparently not in the form of enforceable orders. In each case, there was a direct federal interest in the solvency of the regulated entity, and the state court action threatened to "undo" the agency's attempt to manage the solvency issue.
¶ 65 For these reasons, we conclude that the OTS directives had preemptive authority.
¶ 66 In sum, we conclude that the agency directives were not invalid due to the alleged condition precedent in the REIT's certificate of incorporation, that the federal regulation at issue created preemptive authority for the directives, and that the directives carried the force of federal law relevant for preemption purposes. Accordingly, we affirm the circuit court's order dismissing the complaint on preemption grounds, and do not reach additional arguments made by the defendants for dismissal of M & I's complaint.
State Farm Bank, F.S.B. v. Burke, 445 F.Supp.2d 207, 218 (D.Conn.2006) (citation omitted; internal quotation marks omitted). However, as discussed below, even applying the traditional presumption against preemption and limiting our analysis to conflict preemption, each of M & I's specific contentions on appeal is without merit.
(Emphasis added.) The preemptive reach of 12 C.F.R. § 560 is further refined by 12 C.F.R. § 560.2(b) (listing thirteen, non-exclusive examples of "types of state laws preempted," such as those "purporting to impose requirements regarding" "Loan-to-value ratios" and "Access to and use of credit reports") and by 12 C.F.R. § 560.2(c) (specifying that state laws of certain types, such as "Contract and commercial law," "are not preempted to the extent that they only incidentally affect the lending operations of Federal savings associations or are otherwise consistent with the purposes of paragraph (a) of this section.").