OCC Files Suit to Prevent New York Attorney General From Disrupting Fair Lending Examination

WASHINGTON – The Office of the Comptroller of the Currency filed suit against the New York Attorney General today, seeking a declaratory judgment and preliminary injunction to prevent him from interfering in the OCC's fair lending examination and supervision processes at national banks. The OCC's action follows the filing of a suit by The Clearing House Association, New York, seeking similar remedies against the New York Attorney General.

"The OCC is absolutely committed to assuring that the national banking system is free of lending discrimination of any sort," said acting Comptroller of the Currency Julie L. Williams. "This issue is vital and it is complex and it must not be politicized. The OCC will take whatever steps are needed to assure that the lending practices in the national banking system are reviewed thoroughly, carefully and fairly."

"Last month, I reached out to the Attorney General's office to discuss how we each might work in a complementary way, in the areas of our respective jurisdiction, to ensure that laws against lending discrimination are upheld," she continued. "The Attorney General's office has indicated that it is not interested in pursuing such a collaborative approach. Unfortunately, the Attorney General’s actions undermine the OCC's ability to effectively implement our supervisory responsibilities."

"While the New York Attorney General's office has legitimate authority for a great number of lending institutions operating in the state, federal law provides that lending activities of national banks and their subsidiaries are under the jurisdiction of the OCC," said Ms. Williams.

"These are not new legal standards," she added. "The laws here were enacted in 1864."

"The American people are best served when the resources of government are used effectively and efficiently," she said. "We at the OCC stand ready to work constructively with the New York Attorney General's office as we pursue our respective areas of work."

The OCC is in the process of assessing new data collected under the Home Mortgage Disclosure Act as part of its fair lending evaluations. "The efforts of the New York Attorney General to examine and direct the actions of national banks and their operating subsidiaries creates confusion and uncertainty concerning the OCC's authority and its supervisory expectations for national banks that undermines our ability to carry out our supervisory responsibilities," said Ms. Williams.

In its suit, the OCC noted that the New York Attorney General’s office has sought both public and non-public information about the mortgage lending business of four national banks that do business in New York.

However, Section 484 of the National Bank Act, enacted in 1864, generally forbids any assertion of visitorial authority by state officers to supervise or examine national banks and prohibits state authorities from inspecting the records of national banks or bringing enforcement actions against national banks, except as specifically authorized by federal law. Under federal law and OCC regulation, the operating subsidiaries of national banks are treated the same as the bank itself.

In seeking relief, the OCC's complaint states that the New York Attorney General's "violation of the federal law interferes with the OCC's ability to carry out its responsibilities under federal law, causing irreparable harm to the OCC's administration of the national banking system."

The defendant's "assertion of visitorial authority over national banks and their operating subsidiaries represents an interference with the OCC's plenary authority to ensure the efficiency and integrity of the federal national bank supervisory regime," the complaint states.

In addition to seeking a preliminary injunction, the OCC is asking the federal court to:

Declare that the state Attorney General may not demand, examine, or inspect the books and records of national banks or their operating subsidiaries, except as specifically authorized under federal law.

Declare that the New York agency has no authority to enforce the Equal Credit Opportunity Act, New York Executive Law section 296-a or other laws, rules or regulations concerning the banking activities of national banks or their operating subsidiaries except as specifically authorized under federal law.

Permanently enjoin the New York Attorney General from demanding, examining or inspecting the books and records of any national banks or their operating subsidiaries, except as specifically authorized by federal law.

Permanently enjoin the New York Attorney General from instituting any enforcement activities against national banks or their operating subsidiaries, except as specifically authorized by federal law and from any further usurpation of the OCC's exclusive authority to supervise and examine national banks or their operating subsidiaries, except as specifically authorized by federal law.

Related Links

• Motion for Preliminary Injunction (PDF)
• Complaint (PDF)
• Memorandum in Support of Motion for Preliminary Injunction (PDF)