In a ruling that surprised many, on June 29, 2009, the U.S. Supreme Court reversed the
Court of Appeals for the Second Circuit and held that the Office of the Comptroller of
the Currency’s (“OCC”) regulation preempting state law enforcement of applicable state
laws against national banks to be invalid as far as a state’s prosecution of enforcement
actions against national banks. Cuomo v. Clearing House Association, L.L.C., Et. Al., 557
U.S. ____ , Slip. Op. No. 08-453 (2009). In doing so, the Court made a distinction between
a sovereign’s “visitorial powers” and its power to enforce the law, and ruled that the
National Bank Act’s (“NBA”) prohibition on “visitorial powers” does not prohibit
“ordinary enforcement of state law.” However, such enforcement is limited to
enforcement pursuant to filing suit in a court of law, and does not extend to the state’s
investigation of national banks other than pursuant to a lawsuit, such as issuing
subpoenas for information to national banks without court approval. Penny Somer-Greif of Ober|Kaler discusses.
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