Supreme Court Rules That States Can Enforce State Laws Against National Banks

by Sonya Smith-Valentine on June 30, 2009

In 2005, the Attorney General for New York began an investigation into lending practices by national banks in the State of New York and whether these practices violated New York’s fair-lending laws. As part of the investigation, the Attorney General sent a letter to a number of national banks asking that they provide specific information about their lending practices. These letters were sent “in lieu of subpoena.”  The Office of the Comptroller of the Currency (“OCC”) and a banking trade group, the Clearing House Association, brought suit to prevent the information request, on the basis that OCC’s regulations under the federal National Bank Act prohibited state law enforcement against national banks.

The Court, in its opinion written by Justice Scalia, stated that the OCC has right to oversee corporate affairs which is quite separate from the power to enforce the law.  The Court further said that if a state statute of general applicability is not substantively pre-empted, then the power of enforcement must rest with the State and not with the federal government.

Comments on this entry are closed.

Previous post:

Next post: