Term: 2008
Docket: 08-453
Andrew M. Cuomo, Attorney General Of New York v. The Clearing House Association, L. L. C., Et Al.
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08-453 CUOMO V. THE CLEARING HOUSE ASSOCIATION, L.L.C. DECISION BELOW: 510 F.3d 105 EXPEDITED BRIEFING SCHEDULE. CERT. GRANTED 1/16/2009 QUESTION PRESENTED: 12 U.S.C. § 484(a), a provision of the National Bank Act, prohibits the exercise of "visitorial powers" as to national banks, except where those powers are authorized by federal law, vested in the courts of justice, or exercised by Congress or a House or committee thereof. The Office of the Comptroller of the Currency has issued a regulation (12 C.F.R. § 7.4000) interpreting § 484(a) to preempt state enforcement of state laws against national banks, even when the state laws are not substantively preempted. The questions presented are: 1. Whether 12 C.F.R. § 7.4000 is entitled to judicial deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). 2. Whether 12 C.F.R. § 7.4000 is invalid because it is inconsistent with the authoritative construction of the National Bank Act by this Court in First National Bank in St. Louis v. Missouri, 263 U.S. 640 (1924). LOWER COURT CASE NUMBER: 05-5996, 05-6001
In the case of Andrew M. Cuomo, Attorney General of New York v. The Clearing House Association, L.L.C., et al., 2008, the U.S Supreme Court ruled in favor of Cuomo. The issue at hand was whether federal law preempts state law enforcement with respect to national banks. In this context, Cuomo had issued letters to several national banks requesting non-public information about their lending practices as part of an investigation into alleged racial discrimination in housing loans - a violation under New York's fair-lending laws. However, these banks and the Office of Comptroller Currency (OCC) argued that states have no authority over federally chartered institutions due to federal banking laws' "visitorial powers" clause which they claimed gave exclusive oversight power to OCC only. The court held that while states cannot exercise visitorial powers (i.e., regular examination or inspection), it does not prevent them from enforcing their own fair-lending laws against such entities; thus allowing for parallel co-existence between state and federal regulatory regimes without one completely preempting another.
In the dissenting opinion for Cuomo v. The Clearing House Association, Justice Clarence Thomas argued that the Office of the Comptroller of Currency (OCC) had exclusive visitorial powers over national banks and thus, state officials like New York's Attorney General could not enforce non-preempted state laws against these institutions. He contended that federal law preempts states from exercising their own oversight or enforcement actions on national banks without express permission from OCC. This interpretation was based on his reading of National Bank Act’s language and its legislative history which he believed showed Congress intended to give OCC sole power to address compliance with banking laws by national banks. He also expressed concern about potential disruption in banking regulation if individual states were allowed to exercise such authority independently.
