The Conference of State Bank Supervisors (CSBS) is pleased the U.S. Supreme Court has acknowledged and endorsed the vital role state authorities have in providing financial consumer protection. By ruling in favor of New York Attorney General Andrew M. Cuomo in the case Cuomo v. Clearing House today, the Supreme Court recognized state authority to enforce state laws upon all financial firms doing business in their states. The decision overturns a policy imposed by the Office of the Comptroller of the Currency (OCC) that had pre-empted a state’s authority to enforce applicable state consumer protection laws against national banks operating in the state.
This decision will reverse OCC policies that threatened the dual banking system, negatively impacted consumers and homeowners, and had adverse consequences for local and regional communities, as well as the nation’s economy as a whole. 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.
We are also pleased that the Obama Administration in its recent proposal for financial regulatory reform has recognized the damage to consumers and the economy created by federal regulatory preemption and appreciates the important role the states play in protecting consumers. It is imperative that Congress acts to reinforce in statute the President’s proposal which calls for federal regulations to “serve as a floor, not a ceiling” to state consumer protection laws. In addition, the proposal underscores the need for states to be able to enforce both state and federal law “concurrently with respect to institutions of all types” and regardless of charter. We look forward to working with Congress to help codify the administration’s plan and solidify the interpretations of Federal law that the Supreme Court has decided today.
For a copy of the Supreme Court decision, go to http://www.supremecourtus.gov/opinions/08pdf/08-453.pdf.
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The Conference of State Bank Supervisors (CSBS) is the nationwide organization for state banking, representing the bank regulators of the 50 states, the District of Columbia, Guam, Puerto Rico and the Virgin Islands. State authorities supervise approximately 6,000 state-chartered financial institutions. CSBS is also responsible for improving the quality of state bank supervision by providing department performance evaluation and accreditation programs and supervisory education/training programs for state banking department personnel.
Information Contact: Catherine Woody, Director of Public Relations for Policy, email@example.com or (202) 728-5733