I disagree with my colleagues’ conclusion that the anti-pass-through provision of New York State Tax Law § 253 (1-a) is preempted by regulations promulgated by Federal Home Loan Bank Board (now the Office of Thrift Supervision), and accordingly vote to affirm.
In 1978, the New York State Legislature amended Tax Law § 253 (1-a) to impose an additional mortgage recording tax of 25 cents per $100 of principal debt. Revenues raised by the new tax were earmarked for funding of the New York State Mortgage Guarantee Corporation, which was created for the purpose of insuring mortgages in economically depressed areas which had previously been "red lined” by State lending institutions (see, mem to Counsel to Governor from Div of Budget, dated Feb. 15, 1978). Unlike the preexisting mortgage tax of 50 cents per $100 of principal debt, the Legislature required the new recording tax to be paid by the mortgagee lending institution, expressly providing that the tax "shall not be paid or payable, directly or indirectly, by the mortgagor”. The additional mortgage tax must thus "be paid by the lender and cannot be passed on to the seller, real estate broker or other third person” (see, Matter of State of New York v Intercounty Mortgagee Corp., 87 AD2d 748, 749).
At issue on appeal is whether the anti-pass-through provision of the mortgage recording tax is preempted by a regulation of the Federal Home Loan Bank Board (hereinafter Board), which permits Federal savings and loan institutions, in connection with real estate loans, to require a borrower to pay "necessary initial charges connected with making a loan, including the actual costs of title examination, appraisal, credit report, survey, drawing of papers, loan closing, and other necessary incidental services and costs” (12 CFR 545.32 [b] [5] [emphasis added]). The regulation permits Federal savings and loan institutions to collect such charges from the borrower and "pay the persons rendering services” (12 CFR 545.32 [b] [5]).
Whether the Board had the authority to promulgate a regulation which preempts this State’s mortgage recording tax is less than clear. In Fidelity Fed. Sav. & Loan Assn. v De la Cuesta (458 US 141), the Supreme Court was presented with the question of whether a regulation permitting Federal savings and loan associations to use "due-on-sale” clauses in their mortgage contracts displaced restrictions imposed by the Supreme Court of California on the exercise of these clauses. Applying traditional preemption analysis, the Supreme Court *178concluded that State restriction of "due-on-sale” clauses in mortgage contracts was preempted, pointing out that "[e]ven where Congress has not completely displaced state regulation in a specific area, state law is nullified to the extent that it actually conflicts with federal law. Such a conflict arises when 'compliance with both federal and state regulations is a physical impossibility’ * * * or when state law 'stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress’ ” (Fidelity Fed. Sav. & Loan Assn. v De la Cuesta, 458 US 141, 153, supra, quoting from Florida Avocado Growers v Paul, 373 US 132, 142-143, and Hines v Davidowitz, 312 US 52, 67).
Although the De la Cuesta court declined to decide the question of whether the Board occupied the entire field of Federal savings and loan regulation, Justice O’Connor concurred in a separate opinion "to emphasize that the authority of the Federal Home Loan Bank Board to pre-empt state laws is not limitless” (Fidelity Fed. Sav. & Loan Assn. v De la Cuesta, supra, at 171). Justice O’Connor added that "[n]othing in the language of § 5(a) of HOLA, which empowers the Board to 'provide for the organization, incorporation, examination, operation, and regulation’ of federally chartered savings and loans, remotely suggests that Congress intended to permit the Board to displace local laws, such as tax statutes * * * not directly related to savings and loan practices” (Fidelity Fed. Sav. & Loan Assn. v De la Cuesta, supra, at 172 [emphasis supplied]).
As previously noted, New York State’s mortgage recording tax was designed as a funding mechanism for the New York State Mortgage Guarantee Corporation, which insures home mortgage loans made in depressed areas. The mortgage tax was thus designed to help ensure that residents of these areas have an opportunity to obtain mortgages, and does not impinge upon either the operational character or the internal management of Federal savings and loan associations (see, Departamento de Asuntos del Consumidor v Oriental Fed. Sav., 648 F Supp 1194). Moreover, while the State Legislature has determined that the lending institutions which are protected by the mortgage insurance fund must bear the burden of its funding, in most cases the lending institutions which are required to pay the mortgage recording tax imposed by Tax Law § 253 (1-a) are allowed to credit such payments against either their corporate, franchise, unincorporated business income, bank or insurance taxes. The tax therefore has a *179neutral effect on such lending institutions. Under these circumstances, it appears that the mortgage recording tax is not "directly related to savings and loan practices”. Accordingly, Justice O’Connor’s reasoning strongly suggests that the Board was without authority to preempt this State’s mortgage recording tax statute.
Even assuming, however, that the Board had authority to issue a regulation displacing New York’s mortgage tax statute, I disagree with the majority’s conclusion that the regulation at issue, which permits Federal savings and loan institutions to pass along "initial loan charges” to customers, is in conflict with Tax Law § 253 (1-a). While the Federal Home Owners’ Loan Act granted the Board broad powers of regulation over Federal savings and loan associations, most courts have been unwilling to declare that Congress has occupied the entire field of Federal savings and loan regulation (First Fed. Sav. & Loan Assn. v Greenwald, 591 F2d 417; Departamento de Asuntos del Consumidor v Oriental Fed. Sav., 648 F Supp 1194, supra; Morse v Mutual Fed. Sav. & Loan Assn., 536 F Supp 1271). Preemption analysis has therefore focused on specific areas of conflict between Federal and State regulations on a case-by-case basis (Departamento de Asuntos del Consumidor v Oriental Fed. Sav., supra, at 1197). Thus, the narrower question presented at bar is whether New York’s mortgage recording tax conflicts with 12 CFR 545.32 (b) (5) because it falls within the classification of an "initial loan charge”, which the Bank Board’s regulation permits Federal savings and loan associations to pass on to their customers.
Contrary to the appellant’s contention, the mortgage recording tax is not an "initial loan charge” within the meaning of 12 CFR 545.32 (b) (5). The specific items enumerated in that regulation, such as title examinations and credit reports, refer to services rendered to the bank in connection with making a loan. In contrast, Tax Law § 253 (1-a), imposes a tax upon lending institutions for the privilege of recording a mortgage (see, Matter of Citibank v State Tax Commn., 98 AD2d 929). While it is clear that the Bank Board intended to permit Federal associations to charge their customers for services rendered by private parties in connection with the loan application and loan closing process, a mortgage recording tax is paid to the State for the exercise of a privilege, and not to a third person in exchange for a service rendered. Thus, as the respondent points out, "there is no support for the proposition that the Board further intended to strip state legislatures of *180their traditional power to determine who will pay the taxes they impose”.
Moreover, the application of settled principles of statutory construction further militate against the overly broad interpretation of 12 CFR 545.32 (b) (5) urged by the appellant. The ejusdem generis rule of statutory construction requires the court to limit the general language of a statute (or, in this case, a regulation) by specific phrases which have preceded the general language (see, McKinney’s Cons Laws of NY, Book 1, Statutes § 239; Barsh v Town of Union, 126 AD2d 311). Since taxes are not among the class or kind of items specified in 12 CFR 545.32 (b) (5), the application of the ejusdem generis rule leads to the conclusion that they are not "other necessary incidental services and costs”. Accordingly, I conclude that there is no actual conflict between Tax Law § 253 (1-a) and 12 CFR 545.32 (b) (5), and that the Federal regulation does not preempt the anti-pass-through provision of the mortgage recording tax.
Balletta and Miller, JJ., concur with Ritter, J.; Fiber, J., and Kunzeman, J. P., dissent in a separate opinion by Fiber, J.
Ordered that the order is reversed, on the law, without costs or disbursements, the motion is denied, the cross motion is granted to the extent that it is declared that Tax Law § 253 (1-a) (a), insofar as it prohibits the plaintiff from passing on a mortgage recording tax to the mortgagor, is unenforceable as against the plaintiff, and New York State is enjoined from enforcing against the plaintiff so much of Tax Law § 253 (1-a) (a) as prohibits the plaintiff from passing on a mortgage recording tax to the mortgagor, and the matter is remitted to the Supreme Court, Nassau County, for determination of the remaining demands for relief in the plaintiff’s complaint, and the entry of an appropriate judgment.