Cuomo v. Clearing House Association, L.L.C.
Issues
Whether the Office of the Comptroller of the Currency's regulation 12 C.F.R. § 7.4000, which interprets 12 U.S.C. §484(a) of the National Bank Act to preempt state enforcement of state laws against national banks even when the state laws are not substantively preempted, is entitled to deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), and/or whether the regulation is invalid because of the construction of the National Bank Act, as announced in First National Bank in St. Louis v. Missouri, 263 U.S. 640 (1924).
Suspecting racially discriminatory lending practices, the Attorney General of New York State sent letters of inquiry to numerous national banks requesting information about their lending practices and warning them of the potential illegality of their acts. The Office of the Controller of the Currency ("OCC") and the Clearing House Association L.C.C., which consists of several national banks, maintained that the National Bank Act's "visitorial powers" provisions, interpreted by the OCC in 12 C.F.R. § 7.4000, bar states from enforcing state laws against national banks. The Attorney General argues that the OCC's interpretation of § 7.4000 violates the Administrative Procedures Act, and that the National Bank Act's "visitorial powers" provisions do not interfere with state enforcement of their generally applicable laws. The decision in this case may affect lending practices and the balance of power between the federal government and state governments.
Questions as Framed for the Court by the Parties
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).
In 2005, Eliot Spitzer, in his official capacity as the New York State Attorney General, began investigating several national banks and their residential real estate lending practices for evidence of racial discrimination. See Clearing House Ass'n L.L.C. v.
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Additional Resources
- About the Office of the Comptroller of the Currency
- Federal Deposit Insurance Corporation ("FDIC"), Side by Side: A Guide to Fair Lending
- Adam Liptak, Justices to Rule on States' Bank Inquiries, NY Times, Jan. 17, 2009