Olson: More power for state AGs bad for banking industry
WASHINGTON (Legal Newsline) - A former U.S. solicitor general recently wrote that allowing state attorneys general to file lawsuits against national banks could result in "burdensome oversight" over their lending practices.
Ted Olson, who argues before the U.S. Supreme Court frequently, authored an amicus brief on behalf of the bankers associations of each state and submitted it to the Court April 1. New York Attorney General Andrew Cuomo is asking the Court to give him permission to sue The Clearing House Association.
"State investigations and enforcement actions regarding the exercise of national banks' lending powers could result in burdensome oversight of national banks' day-to-day lending practices," Olson wrote.
"Indeed, the New York Attorney General recently settled a fairlending investigation into the activities of a lending institution through an agreement that mandated extensive and continuous state supervision of the institution's lending practices.
"If the (National Bank Act) were construed to permit similar state examination and regulation of national banks' lending practices, state attorneys general could undertake equally intrusive oversight of national banks' day-to-day lending activities and 'impose limitations and restrictions as various and as numerous as the states."
National banks are regulated by the Office of Controller of Currency. State attorneys general have also asked President Barack Obama to give them the power.
Olson wrote that Cuomo is trying to avoid preemption issues by arguing that his investigation into compliance of fair-lending laws falls outside of the responsibilities given to the OCC by the NBA.
"But the fact that a state examination of a national bank's records serves a consumer-protection purpose does not remove that examination from the scope of OCC's exclusive visitorial powers," Olson wrote.
Cuomo has already received several amicus briefs in support of his cause, including one from every state attorney general and another from members of Congress.
Linda Singer, a former District of Columbia attorney general who now works at Zuckerman Spaeder, authored the brief on behalf of U.S. Reps. Barney Frank (D-Mass.), John Conyers (D-Mich.), Carolyn Maloney (D-N.Y.), Melvin Watt (D-N.C.), Luis Gutierrez (D-Ill.) and William Lacy Clay (D-Mo.).
Last year, a federal judge said West Virginia Attorney General Darrell McGraw's suit against Capital One was "hijacked" because Capital One switched to national bank status during it.
From Legal Newsline: Reach John O'Brien by e-mail at firstname.lastname@example.org.
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