U.S. Supreme Court Decides Cuomo v. Clearing House
In Cuomo v. Clearing House Association, LLC, former New York Attorney General Elliot Spitzer sent requests to several national banks, in lieu of subpoenas, seeking non-public information regarding whether the banks had violated the state's fair-lending laws. The U.S. Office of the Comptroller of the Currency ("OCC"), the federal regulator of national banks, and Clearing House Association, a banking trade group, sued to enjoin the New York Attorney General (later Andrew Cuomo, the petitioner here.)
The district court entered an injunction prohibiting the enforcement of state fair-lending laws against national banks through information requests or judicial proceedings. The Second Circuit affirmed. The U.S. Supreme Court granted certiorari to determine whether the OCC's regulations preempting state law enforcement against national banks (12 C.F.R. § 7.400) are a reasonable interpretation of 12 U.S.C. § 484(a), the National Bank Act of 1864.
In a 5 to 4 decision, the Supreme Court held that the OCC's regulations were not entitled to Chevron deference and concluded that states may enforce state laws against national banks despite the prohibition on state's exercising visitorial powers. After noting that there was "some ambiguity" in the definition of "visitorial powers" in Section 484(a), the Court held that the OCC's exclusive exercise of "visitorial powers" did not preclude law enforcement by the states. Thus, the Court drew a distinction between enforcement of non-preempted state law against a national bank and exclusive "visitorial powers" over that bank, which would include oversight, supervision, and regulation.
