Supreme Court Hears Arguments Today in Bank Regulation Tussle
The U.S. Supreme Court today will hear oral arguments in an appeal that contends the state of New York may require national banks to comply with its anti-discrimination laws.
The case arose when the attorney general of New York asked banks why they were charging such high interest rates to blacks and Hispanics. A victory for New York could “open a new era for 50 state regulators to play a bigger role” in regulation of banks, the Wall Street Journal reports (sub. req.). The New York Times says the case “involves fundamental issues of federalism and consumer protection.”
The Office of the Comptroller of the Currency argues it has exclusive authority to regulate under the National Bank Act, and when state laws do apply it is the only agency that may enforce them, according to the stories.
But an amicus brief filed by 49 state attorneys general questions the effectiveness of such a scheme. “The recent (and continuing) fallout from the subprime lending debacle demonstrates the need for more oversight and consumer protection enforcement in the area of mortgage lending,” the brief says.
The case is Cuomo v. The Clearing House Association.
