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Wilmarth, Arthur E. --- "Cuomo v. Clearing House: The Supreme Court Responds to the Subprime Financial Crisis and Delivers a Major Victory for the Dual Banking System and Consumer Protection" [2010] ELECD 701; in Mitchell, E. Lawrence; Wilmarth, Jr, E. Arthur (eds), "The Panic of 2008" (Edward Elgar Publishing, 2010)

Book Title: The Panic of 2008

Editor(s): Mitchell, E. Lawrence; Wilmarth, Jr, E. Arthur

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849802611

Section: Chapter 12

Section Title: Cuomo v. Clearing House: The Supreme Court Responds to the Subprime Financial Crisis and Delivers a Major Victory for the Dual Banking System and Consumer Protection

Author(s): Wilmarth, Arthur E.

Number of pages: 52

Extract:

12. Cuomo v. Clearing House:
The Supreme Court responds to
the subprime financial crisis and
delivers a major victory for the
dual banking system and consumer
protection
Arthur E. Wilmarth, Jr.*

INTRODUCTION

In Cuomo v. Clearing House Ass'n, L.L.C.,1 the Supreme Court held that
the Office of the Comptroller of the Currency (OCC) exceeded its author-
ity when it adopted a regulation (12 C.F.R. § 7.4000) that prohibited
state officials from filing lawsuits to enforce applicable state laws against
national banks. The Court upheld the OCC's regulation only to the
extent that it bars state authorities from bringing administrative enforce-
ment proceedings against national banks. Thus, the Court drew a clear
distinction between `administrative oversight' of national banks by state
officials ­ which the Court viewed as preempted by the National Bank Act
(NBA) ­ and `judicial enforcement actions' against national banks by state
officials, which the Court found to be consistent with the NBA and the
Court's prior decisions.2
Cuomo arose out of an attempt by the New York Attorney General
(NYAG) to enforce New York's fair lending laws against several large
national banks that were heavily engaged in nonprime mortgage lending.
By affirming New York's authority to enforce its fair lending laws against
national banks through the courts, the Supreme Court exhibited a per-
spective on banking regulation that sharply contrasted with the Court's
approach only two years earlier in Watters v. Wachovia Bank, N.A.3 In
...