{
  "id": "R40595",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R40595",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 414795,
      "date": "2011-01-11",
      "retrieved": "2016-04-07T01:12:14.005966",
      "title": "Cuomo v. The Clearing House Association, L.L.C.: National Banks Are Subject to State Lawsuits to Enforce Non-Preempted State Laws",
      "summary": "On June 29, 2009, the U.S. Supreme Court ruled that the National Bank Act (NBA) does not preempt states from bringing judicial actions against national banks to enforce non-preempted state anti-discrimination laws, and by implication state consumer protection laws, as long as the state authorities do not encroach on the visitorial powers of the national bank regulator, the Office of Comptroller of the Currency (OCC). The Court ruled that administrative subpoenas or other forms of administrative oversight or examination are included in visitorial powers and, thus, are not available as state enforcement tools. The case, Cuomo v. The Clearing House Association, L.L.C.,___ U.S. ___, 129 S.Ct. 2710 (2009), involves a challenge by national banks and OCC to an attempt by the New York State Attorney General (AG) to investigate possible discrimination in real estate lending by certain national banks and their subsidiaries. In response to a request that these banks provide non-public information about their real estate policies and loans in New York, a banking association to which these banks belong, The Clearing House Association, L.L.C., and OCC obtained trial and appellate court orders enjoining the state investigation and enforcement efforts.\nThe Supreme Court decision invalidated an OCC regulation, 12 C.F.R. \u00a7 7.4000, to the extent that it preempted state officials from \u201cprosecuting enforcement actions\u201d against national banks. That regulation reflected OCC\u2019s interpretation of 12 U.S.C. \u00a7 484, a provision of the NBA which proclaims that \u201cno national bank shall be subject to any visitorial powers except as authorized by Federal law, vested in the courts of justice, or such as shall be, or have been exercised or directed by Congress.\u201d The Court\u2019s opinion analyzed the OCC regulation on the basis of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). It recognized that the term \u201cvisitorial powers\u201d is ambiguous and that judicial deference should be accorded to a reasonable interpretation of the term by the agency charged with interpreting it, OCC. The Court, however, found that OCC\u2019s interpretation did not meet the reasonableness standard. The Court\u2019s opinion concluded that OCC had no reasonable basis for equating visitorial power delegated to OCC by the NBA and a state\u2019s sovereign power to enforce its own non-preempted state laws with respect to national banks. Dissenting on this point, Justice Thomas, joined by Chief Justice Roberts and Justices Kennedy and Alito, would have upheld the OCC regulation and the breadth of OCC\u2019s interpretation of visitorial power as a reasonable interpretation of an ambiguous statute and, therefore, falling within Chevron and worthy of judicial deference.\nSubtitle D of Title X, the Consumer Financial Protection Act of 2010, of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), P.L. 111-203, contains a provision designed to codify the ruling of the Supreme Court in Cuomo that federal visitorial clause provisions do not prohibit state enforcement actions. There is also a provision authorizing state attorneys general and state regulators to bring actions against national banks and federal savings associations for violations of Title X and any implementing regulations. The legislation also defines a standard and some procedural requirements for OCC to follow in preempting the applicability of state consumer protection laws to national banks or federal savings associations. These provisions in Dodd-Frank follow other efforts in the 111th Congress to deal with the issue of federal preemption of state efforts to enforce financial consumer protection laws.\nThe 112th Congress may be presented with legislation to amend the Dodd-Frank provisions and/or opportunities to evaluate how the interaction between state and federal consumer protection laws and enforcement efforts is protecting consumers without unduly burdening nationwide banking concerns.",
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      "typeId": "REPORTS",
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  "topics": [
    "American Law",
    "Economic Policy"
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}