MORTGAGE LOAN COMPLIANCE®

The U.S. Supreme Court has ruled state attorney generals have the right to bring judicial enforcement actions against nationally chartered banks. However, the court also ruled, in the case Cuomo v. Clearing House, that they do not have the right to issue subpoenas for information. The case began when then-New York Attorney General Eliot Spitzer asked a number of national banks to provide nonpublic information about their lending practices as it applied to fair lending laws. The case was pursued by his successor, former Housing and Urban Development secretary Andrew Cuomo.

The Office of the Comptroller of the Currency opposed the move, along with the Clearing House Association. The ruling overturns in part two lower court decisions in favor of OCC. In a statement, the Council of State Bank Supervisors said "Statements that state enforcement is an inconsistent 'patchwork quilt' are unfounded and were effectively deemed unconvincing by the Court's decision today. State law enforcement authorities work in concert with officials from other agencies and states to bring enforcement actions that protect consumers."

John Cooney, a partner at the law firm Venable LLC and former assistant solicitor general, said "The decision means that national banks will be subject to a greater risk of investigations and enforcement actions by State Attorneys General, unless they can persuade Congress to overturn the decision and grant the OCC express authority to preempt the states from applying their own fair lending and consumer protection statutes to national banks."