No. 08-453
`
`IN THE
`Supreme Court of the United States
`
`
`ANDREW M. CUOMO, IN HIS OFFICIAL CAPACITY AS
`ATTORNEY GENERAL FOR THE STATE OF NEW YORK,
`Petitioner,
`
`v.
`
`THE CLEARING HOUSE ASSOCIATION L.L.C., AND
`OFFICE OF THE COMPTROLLER OF THE CURRENCY,
`Respondents.
`
`
`ON WRIT OF CERTIORARI TO THE UNITED STATES
`COURT OF APPEALS FOR THE SECOND CIRCUIT
`
`BRIEF FOR RESPONDENT
`THE CLEARING HOUSE ASSOCIATION L.L.C.
`
`
`SETH P. WAXMAN
` Counsel of Record
`EDWARD C. DUMONT
`CATHERINE M.A. CARROLL
`CHRISTOPHER E. BABBITT
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`1875 Pennsylvania Ave., N.W.
`Washington, D.C. 20006
`(202) 663-6000
`
`CHRISTOPHER R. LIPSETT
`NOAH A. LEVINE
`ANNE K. SMALL
`LAUREN E. BAER
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`399 Park Ave.
`New York, N.Y. 10022
`
`H. RODGIN COHEN
`ROBINSON B. LACY
`MICHAEL M. WISEMAN
`ADAM R. BREBNER
`SULLIVAN & CROMWELL LLP
`125 Broad Street
`New York, N.Y. 10004
`
`
`
`
`
`
`
`
`
`IN THE
`Supreme Court of the United States
`
`
`ANDREW M. CUOMO, IN HIS OFFICIAL CAPACITY AS
`ATTORNEY GENERAL FOR THE STATE OF NEW YORK,
`Petitioner,
`
`v.
`
`THE CLEARING HOUSE ASSOCIATION L.L.C., AND
`OFFICE OF THE COMPTROLLER OF THE CURRENCY,
`Respondents.
`
`
`ON WRIT OF CERTIORARI TO THE UNITED STATES
`COURT OF APPEALS FOR THE SECOND CIRCUIT
`
`BRIEF FOR RESPONDENT
`THE CLEARING HOUSE ASSOCIATION L.L.C.
`
`
`SETH P. WAXMAN
` Counsel of Record
`EDWARD C. DUMONT
`CATHERINE M.A. CARROLL
`CHRISTOPHER E. BABBITT
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`1875 Pennsylvania Ave., N.W.
`Washington, D.C. 20006
`(202) 663-6000
`
`CHRISTOPHER R. LIPSETT
`NOAH A. LEVINE
`ANNE K. SMALL
`LAUREN E. BAER
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`399 Park Ave.
`New York, N.Y. 10022
`
`H. RODGIN COHEN
`ROBINSON B. LACY
`MICHAEL M. WISEMAN
`ADAM R. BREBNER
`SULLIVAN & CROMWELL LLP
`125 Broad Street
`New York, N.Y. 10004
`
`
`
`
`
`
`
`
`
`
`
`QUESTION PRESENTED
`
`Was the New York State Attorney General prop-
`erly enjoined from demanding records of national banks
`relating to their mortgage lending, and from commenc-
`ing proceedings to enforce state laws against national
`banks based on their mortgage lending, because such
`demands and enforcement proceedings would consti-
`tute an exercise of “visitorial powers” prohibited by 12
`U.S.C. § 484 and 12 C.F.R. § 7.4000, a regulation prom-
`ulgated by the Office of the Comptroller of the Cur-
`rency?
`
`(i)
`
`
`
`
`
`
`CORPORATE DISCLOSURE STATEMENT
`
`Respondent The Clearing House Association
`L.L.C. is an association of leading commercial banks,
`some of which are national banks. The Clearing House
`has no parent corporation and no publicly held company
`owns 10% or more of its stock.
`In this action the Clearing House asserted associa-
`tional standing on behalf of its members, and the decree
`entered by the District Court specifically applies to na-
`tional banks that were members of the Clearing House
`when the decree was entered: Bank of America, Na-
`tional Association; Citibank, N.A.; HSBC Bank USA,
`National Association; JPMorgan Chase Bank, National
`Association; LaSalle Bank National Association; U.S.
`Bank National Association; Wachovia Bank, National
`Association; and Wells Fargo Bank, National Associa-
`tion. All these banks are still members of the Clearing
`House except LaSalle Bank National Association and
`Wachovia Bank, National Association.
`
`
`(ii)
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`Page
`QUESTION PRESENTED...............................................i
`CORPORATE DISCLOSURE STATEMENT.............ii
`TABLE OF AUTHORITIES ...........................................v
`STATEMENT .....................................................................1
`A. The Attorney General’s Authority Un-
`der New York Law ...............................................2
`B. The Mortgage-Lending Investigation ...............3
`SUMMARY OF ARGUMENT.........................................7
`ARGUMENT.....................................................................10
`I. THE NATIONAL BANK ACT BROADLY PRE-
`CLUDES STATE INVESTIGATIONS OR EN-
`FORCEMENT ACTIONS THAT RELATE TO A
`NATIONAL BANK’S EXERCISE OF ITS AU-
`THORIZED BANKING POWERS ...................................10
`A. The Text And History Of § 484.........................11
`1. The National Bank Act ...............................11
`2. The historical understanding of
`“visitorial powers” .......................................13
`3. This Court’s construction of “visito-
`rial powers” in Guthrie v. Harkness ..........16
`4. Later congressional consideration
`and amendment of § 484 and re-
`lated provisions ............................................19
`5. This Court’s decision in Watters................26
`
`(iii)
`
`
`
`
`iv
`
`TABLE OF CONTENTS—Continued
`
`Page
`
`B. Concurrent State Enforcement Is In-
`compatible With The Federal Regula-
`tory System..........................................................28
`C. This Court’s Cases Do Not Recognize
`State Power To Enforce State Laws
`Affecting National Banks’ Exercise Of
`Their Authorized Banking Powers...................33
`I. OCC’S REGULATION IS ENTITLED TO DEF-
`ERENCE ........................................................................37
`A. OCC’s Regulation Reasonably Imple-
`ments The Terms Of A Statute That
`Congress Has Entrusted To The
`Agency’s Administration ...................................38
`B. No Clearer Statement Of Congres-
`sional Intent Is Required...................................41
`C. The Preemptive Reach Of § 484 And
`OCC’s Implementing Regulation Do
`Not Limit Chevron Deference ..........................46
`CONCLUSION .................................................................53
`
`
`
`
`
`
`v
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Page(s)
`Alden v. Maine, 527 U.S. 706 (1999)...............................46
`Anderson National Bank v. Luckett, 321
`U.S. 233 (1944) ......................................................35, 36
`Barnett Bank of Marion County, N.A. v.
`Nelson, 517 U.S. 25 (1996)...................................29, 42
`Capital Cities Cable, Inc. v. Crisp, 467 U.S.
`691 (1984) .....................................................................50
`Chevron U.S.A. Inc. v. Natural Resources
`Defense Council, Inc., 467 U.S.
`837 (1984) ........................................ 38, 40, 43, 46, 47, 48
`City of New York v. FCC, 486 U.S. 57
`(1988) ............................................................................50
`Clarke v. Securities Industry Ass’n, 479
`U.S. 388 (1987) ............................................................39
`Davis v. Elmira Savings Bank, 161 U.S.
`275 (1896) .....................................................................12
`Easton v. Iowa, 188 U.S. 220
`(1903) ............................................8, 23, 24, 29, 30, 32, 43
`Farmers’ & Mechanics’ National Bank v.
`Dearing, 91 U.S. 29 (1875)...................................12, 42
`Fidelity Federal Savings & Loan Ass’n v.
`de la Cuesta, 458 U.S. 141 (1982) .............................50
`First National Bank v. Commonwealth, 76
`(9 Wall.) U.S. 353 (1869) ............................................35
`First National Bank in Plant City v. Dick-
`inson, 396 U.S. 122 (1969) .........................................36
`
`
`
`
`
`vi
`
`TABLE OF AUTHORITIES—Continued
`Page(s)
`
`First National Bank in St. Louis v. Mis-
`souri, 263 U.S. 640 (1924) ............... 8, 33, 34, 35, 36, 40
`First National Bank of Bay City v. Fel-
`lows ex rel. Union Trust Co., 244 U.S.
`416 (1917) .....................................................................36
`First Union National Bank v. Burke, 48 F.
`Supp. 2d 132 (D. Conn. 1999) ....................................39
`Gregory v. Ashcroft, 501 U.S. 452 (1991)........................44
`Guthrie v. Harkness, 199 U.S. 148 (1905) .......... 17, 18, 19
`In re Neagle, 135 U.S. 1 (1890) ........................................45
`Johnson v. Maryland, 254 U.S. 51 (1920)......................45
`Kiowa Tribe of Oklahoma v. Manufactur-
`ing Technologies, Inc., 523 U.S. 751
`(1998) ............................................................................46
`La Belle Creole International, S.A. v. At-
`torney-General, 176 N.E.2d 705 (N.Y.
`1961) ...............................................................................2
`Long Island Care at Home, Ltd. v. Coke,
`127 S. Ct. 2339 (2007) ...........................................39, 48
`Marquette National Bank of Minneapolis
`v. First of Omaha Service Corp., 439
`U.S. 299 (1978) ............................................................12
`Mississippi Power & Light Co. v. Missis-
`sippi ex rel. Moore, 487 U.S. 354 (1988) ..................49
`National Cable & Telecommunications
`Ass’n v. Brand X Internet Services,
`545 U.S. 967 (2005) .....................................................40
`
`
`
`
`
`vii
`
`TABLE OF AUTHORITIES—Continued
`Page(s)
`
`National City Bank of Indiana v. Turn-
`baugh, 463 F.3d 325 (4th Cir. 2006)..........................43
`National State Bank, Elizabeth, New Jer-
`sey v. Long, 630 F.2d 981 (3d Cir. 1980)..................37
`NationsBank of North Carolina, N.A. v.
`Variable Annuity Life Insurance Co.,
`513 U.S. 251 (1995) .....................................................39
`New York v. United States, 505 U.S. 144
`(1992) ......................................................................44, 45
`Oklahoma Tax Commission v. Citizen
`Band Potawatomi Indian Tribe of
`Oklahoma, 498 U.S. 505 (1991).................................45
`Printz v. United States, 521 U.S. 898 (1997) .................44
`Rose v. Chase Bank USA, N.A., 513 F.3d
`1032 (9th Cir. 2008).....................................................42
`Smiley v. Citibank (South Dakota), N.A.,
`517 U.S. 735 (1996) ............................................ passim
`Solid Waste Agency of Northern Cook
`County v. U.S. Army Corps of Engi-
`neers, 531 U.S. 159 (2001)..........................................46
`Tarble’s Case, 80 U.S. (13 Wall.) 397 (1872)...................45
`Tiffany v. National Bank of Missouri, 85
`U.S. (18 Wall.) 409 (1873) .........................11, 13, 16, 50
`Trustees of Dartmouth College v. Wood-
`ward, 17 U.S. (4 Wheat.) 518 (1819)...................15, 18
`United States v. Philadelphia National
`Bank, 374 U.S. 321 (1963)..........................................31
`
`
`
`
`
`viii
`
`TABLE OF AUTHORITIES—Continued
`Page(s)
`
`United States v. Shimer, 367 U.S. 374
`(1961) ............................................................................51
`Waite v. Dowley, 94 U.S. 527 (1876)................................35
`Watters v. Wachovia Bank, N.A., 550 U.S.
`1 (2007) ................................................................ passim
`Wyeth v. Levine, No. 06-1249, 2009 WL
`529172 (U.S. Mar. 4, 2009).........................................47
`
`STATUTES
`
`5 U.S.C.
`§ 552(b)(8) ....................................................................31
`§ 553(b).........................................................................52
`12 U.S.C.
`§ 22 First......................................................................44
`§ 36(f)(1) .......................................................................42
`§ 36(f)(1)(A) .................................................................25
`§ 36(f)(1)(B)..................................................................25
`§ 43(a) ...........................................................................52
`§ 85....................................................................13, 39, 47
`§ 93a..................................................................38, 48, 50
`§ 371(a) .....................................................................7, 34
`§ 481........................................................................28, 51
`§ 484..................................................................... passim
`§ 484(a) ...................................1, 8, 22, 27, 38, 41, 43, 47
`§ 484(b)...................................................8, 22, 23, 36, 38
`§ 1818(b)(1) ..................................................................24
`§ 1818(e)(1) ..................................................................24
`§ 1820(h).......................................................................25
`§ 1820(h)(3) ..................................................................42
`
`
`
`
`
`ix
`
`TABLE OF AUTHORITIES—Continued
`Page(s)
`
`Home Mortgage Disclosure Act, 12 U.S.C.
`§§ 2801-2810 ..................................................................3
`22 U.S.C. § 254d .................................................................45
`28 U.S.C. § 1604 .................................................................45
`Omnibus Spending Act of 2009, Pub. L. No.
`111-8, 123 Stat. 524.....................................................21
`Riegle-Neal
`Interstate Banking
`and
`Branching Efficiency Act of 1994, Pub.
`L. No. 103-328, 108 Stat. 2338.............................24, 25
`Garn-St Germain Depository Institutions
`Act of 1982, Pub. L. No. 97-320, 96 Stat.
`Ann. 1469 .....................................................................22
`Financial Institutions Supervisory Act of
`1966, Pub. L. No. 89-695, 80 Stat. 1028....................24
`Banking Act of 1933, Pub. L. No. 73-66, 48
`Stat. 162 .......................................................................24
`Act of Dec. 23, 1913, 38 Stat. 251.....................................20
`Act of June 3, 1864, 13 Stat. 99 ......11, 12, 13, 14, 16, 23, 35
`Mich. Comp. Laws Ann.
`§ 445.1661.....................................................................27
`§ 493.56b.......................................................................27
`N.Y. Banking Law § 9-d .....................................................4
`N.Y. Exec. Law
`§ 63(12) .......................................................................2, 5
`§ 296-a ............................................................................4
`§ 296-a(3)........................................................................4
`§ 296-a(6)-(11)................................................................4
`
`
`
`
`
`x
`
`TABLE OF AUTHORITIES—Continued
`Page(s)
`
`REGULATIONS
`
`12 C.F.R.
`§ 4.6...............................................................................30
`§ 7.4000................................................................ passim
`§ 203.4.............................................................................3
`§ 203.5.............................................................................3
`§ 203.5(c) ........................................................................6
`69 Fed. Reg. 1895 (Jan. 13, 2004).........................38, 49, 51
`68 Fed. Reg. 6363 (Feb. 7, 2003)..........................38, 49, 51
`64 Fed. Reg. 60,092 (Nov. 4, 1999) ......................38, 49, 51
`64 Fed. Reg. 31,751 (June 14, 1999) ..........................38, 49
`61 Fed. Reg. 4849 (Feb. 9, 1996)......................................38
`60 Fed. Reg. 11,924 (Mar. 3, 1995) ..................................38
`48 Fed. Reg. 3936 (Jan. 28, 1983).....................................38
`36 Fed. Reg. 17,000 (Aug. 26, 1971) ................................38
`
`LEGISLATIVE MATERIALS
`Committee on Government Operations,
`The Truth in Lending Act: Federal
`Banking Agency Enforcement and the
`Need for Reform, H.R. Rep. No. 95-280
`(1977) ............................................................................21
`Committee on Banking, Housing, and Ur-
`ban Affairs, Report on Consumer Pro-
`tection and Enforcement Activities by
`the Three Commercial Bank Regula-
`tory Agencies, S. Rep. No. 94-1388
`(1976) ............................................................................21
`
`
`
`
`
`xi
`
`TABLE OF AUTHORITIES—Continued
`Page(s)
`155 Cong. Rec. S2816 (daily ed. Mar. 5, 2009).................22
`140 Cong. Rec. 24,484 (1994) ............................................26
`
`TREATISES
`Angell, Joseph K., & Samuel Ames, Trea-
`tise on the Law of Private Corpora-
`tions (8th ed. 1866) .....................................................15
`Blackstone, William, Commentaries on the
`Laws of England (1765) (Univ. of Chi.
`Press 1979) ............................................................15, 16
`Hammond, Bray, Banks and Politics in
`America (1957)......................................................11, 50
`Kent, James, Commentaries on American
`Law (12th ed. 1873) ..............................................15, 18
`Minor, John B., Institutes of Common and
`Statute Law (2d ed. 1876)..........................................15
`
`OTHER AUTHORITIES
`Comptroller of the Currency, An Exam-
`iner’s Guide to Problem Bank Identifi-
`cation, Rehabilitation, and Resolution
`(2001), available at http://www.occ.
`treas.gov/prbbnkgd.pdf.............................................31
`Comments of the National Association of
`Attorneys General on Responsible Al-
`ternative Mortgage Lending—Notice
`of Proposed Rulemaking, OTS Docket
`No. 2000-34 (July 7, 2000), available at
`http://files.ots.treas.gov/comments/762
`b5a78-fd8e-41e6-a869-2b61ba4714f0.pdf .................32
`
`
`
`
`
`xii
`
`TABLE OF AUTHORITIES—Continued
`Page(s)
`
`Federal Reserve Board, et al., Joint Press
`Release, Agencies Announce Updated
`Answers To Frequently Asked Questions
`About HMDA Price Data (Apr. 3, 2006),
`available at http://www.federalreserve.
`gov/newsevents/press/bcreg/20060403a.
`htm..................................................................................3
`State Attorneys General Amicus Brief, Na-
`tional Home Equity Mortgage Ass’n v.
`OTS, No. 02-2506 (D.D.C. Mar. 21,
`2003) .............................................................................32
`Statement of John D. Hawke, Jr., Comp-
`troller of the Currency, before the S.
`Comm. on Banking, Hous. and Urban
`Affairs, On Federal Preemption of
`State Laws, Washington, D.C., April 7,
`2004, 23 O.C.C. Q.J. 69, 2004 WL
`3418806.........................................................................30
`Testimony of John C. Dugan, Comptroller
`of the Currency, before the S. Comm.
`on Banking, Hous., and Urban Affairs
`(Mar.
`19,
`2009),
`available
`at
`http://www.occ.treas.gov/ftp/release/
`2009-24b.pdf ..........................................................32, 33
`
`
`
`
`
`
`
`
`
`IN THE
`Supreme Court of the United States
`
`No. 08-453
`
`
`ANDREW M. CUOMO, IN HIS OFFICIAL CAPACITY AS
`ATTORNEY GENERAL FOR THE STATE OF NEW YORK,
`Petitioner,
`
`v.
`
`THE CLEARING HOUSE ASSOCIATION L.L.C., AND
`OFFICE OF THE COMPTROLLER OF THE CURRENCY,
`Respondents.
`
`
`ON WRIT OF CERTIORARI TO THE UNITED STATES
`COURT OF APPEALS FOR THE SECOND CIRCUIT
`
`BRIEF FOR RESPONDENT
`THE CLEARING HOUSE ASSOCIATION L.L.C.
`
`
`STATEMENT
`“To prevent inconsistent or intrusive state regula-
`tion from impairing the national [banking] system,”
`Watters v. Wachovia Bank, N.A., 550 U.S. 1, 11 (2007),
`the National Bank Act provides that “[n]o national
`bank shall be subject to any visitorial powers except as
`authorized by Federal law, [or] vested in the courts of
`justice,” 12 U.S.C. § 484(a). A regulation adopted by
`the Comptroller of the Currency, 12 C.F.R. § 7.4000,
`confirms that this provision prohibits state officials
`from conducting regulatory investigations of banks
`chartered under the National Bank Act or otherwise
`
`
`
`
`
`2
`
`seeking to enforce national banks’ compliance with
`state laws that relate to the exercise of their federally-
`authorized banking powers.
`This case arises from an effort by petitioner, the
`Attorney General of New York, to commence a “pre-
`liminary inquiry” (JA173a) into how certain banks
`priced mortgage loans secured by New York properties
`in 2004. That inquiry involved extensive information
`requests, and the threat of subpoenas and judicial en-
`forcement actions, against a number of national banks,
`including members of respondent The Clearing House
`Association L.L.C. JA31a-33a. The courts below
`agreed with the Clearing House and respondent the
`Office of the Comptroller of the Currency (OCC) that
`petitioner should be enjoined from pursuing these state
`enforcement proceedings.
`
`A. The Attorney General’s Authority Under
`New York Law
`New York gives its Attorney General broad au-
`thority to investigate potential violations of state or
`federal law, including the power to subpoena docu-
`ments and witnesses. N.Y. Exec. Law § 63(12) (re-
`printed at Pet. Br. App. 1a-2a). Administrative sub-
`poenas allow him to “take proof and make a determina-
`tion of the relevant facts” before commencing litigation
`or taking any other formal enforcement action. Id. To
`defeat an action to quash a subpoena, the Attorney
`General need only show that the information demanded
`bears a “reasonable relation to the subject-matter un-
`der investigation and to the public purpose to be
`achieved.” La Belle Creole Int’l, S.A. v. Attorney-
`General, 176 N.E.2d 705, 707 (N.Y. 1961) (internal quo-
`tation marks omitted). The Attorney General “rou-
`tinely subpoenas individuals and/or companies, requir-
`
`
`
`
`
`3
`
`ing them to produce information that is relevant to [his]
`investigations, and to testify under oath at subpoena
`hearings.” JA153a.
`These efforts, which may lead—often without any
`judicial involvement—to financial penalties, fundamen-
`tal changes in the way covered entities do business, and
`continuing submission to oversight by the Attorney
`General, are part of the Attorney General’s “long his-
`tory of aggressive enforcement of state and federal
`consumer protection laws.” JA153a. When directed at
`entities that are properly subject to regulation, super-
`vision, and enforcement by state officials, they are per-
`fectly permissible. The question here is whether fed-
`eral law permits the Attorney General to employ the
`same methods to investigate the nature and propriety
`of lending decisions made by national banks.
`
`B. The Mortgage-Lending Investigation
`The investigation at issue here was begun in 2005
`by former Attorney General Eliot Spitzer, after banks
`made disclosures under the federal Home Mortgage
`Disclosure Act, 12 U.S.C. §§ 2801-2810 (HMDA). The
`disclosures reported price data based on annual per-
`centage rates for mortgage loans made in 2004 and cer-
`tain demographic information about borrowers. See 12
`C.F.R. §§ 203.4, 203.5. The Federal Reserve Board,
`which administers HMDA, and other federal agencies
`have cautioned that because HMDA data do not include
`critical factors such as credit scores, loan-to-value ra-
`tios, or consumer debt-to-income ratios, they do not by
`themselves establish whether any apparent disparities
`in loan pricing reflect legitimate differences among in-
`dividual borrowers, or might instead suggest unlawful
`discrimination. See, e.g., Federal Reserve Board, et al.,
`Joint Press Release, Agencies Announce Updated An-
`
`
`
`
`
`4
`
`swers To Frequently Asked Questions About HMDA
`Price Data
`(Apr.
`3,
`2006),
`at
`available
`http://www.federalreserve.gov/newsevents/press/bcreg/
`20060403a.htm (follow “Attachment” link); see also
`JA93a-94a.
`
`In “‘letters of inquiry’” (Pet. Br. 12) sent to various
`lenders less than three weeks after the HMDA data be-
`came available, petitioner’s representatives suggested
`that the data were “troubling on their face.” E.g.,
`JA173a. They observed that racial or ethnic disparities
`in loan pricing might violate state and federal antidis-
`crimination laws “unless legally justified” (id.)—as they
`would be if, for example, they were explained by credit
`history or other nondiscriminatory factors not revealed
`by the HMDA data. The letters indicated that peti-
`tioner had commenced a “preliminary inquiry” into the
`matter. Id.; see also JA168a-183a.
`As an example of a law that might be implicated,
`the inquiry letters cited New York Executive Law
`§ 296-a. See, e.g., JA173a. That law, reprinted at Pet.
`Br. App. 2a-9a, prohibits discrimination in lending, but
`recognizes that it is not discriminatory to make deci-
`sions based on “factually supportable, objective differ-
`ences in applicants’ overall credit worthiness, which
`may include reference to such factors as current in-
`come, assets and prior credit history.” Id. at 4a (§ 296-
`a(3)). On its face, the law commits enforcement princi-
`pally to the state Superintendent of Banks, who may
`issue regulations, receive complaints, determine
`whether they are supported by “probable cause,” con-
`duct hearings, and find violations. Id. at 5a-9a (§ 296-
`a(6)-(11)); see also N.Y. Banking Law § 9-d. The Attor-
`ney General asserts parallel authority to investigate
`
`
`
`
`
`5
`
`and remedy violations of § 296-a under the general au-
`thority conferred by Executive Law § 63(12).
`Petitioner’s inquiry letters, written “[i]n lieu of is-
`suing a formal subpoena,” asked recipient banks to pro-
`duce two categories of information. E.g., JA173a.
`First, the letters sought HMDA data for loans or appli-
`cations involving New York properties. Second, they
`sought substantial amounts of non-public data and ma-
`terials addressing the “business considerations” under-
`lying the pricing of all the reported loans. E.g., JA173a-
`175a. The requests included:
`•
`“A list and explanation of all variables that de-
`termined the APRs for 2004 HMDA reportable
`loans (e.g., credit score, loan-to-value ratio), and
`any formulas or algorithms that were used to
`calculate such rates”;
`“An extract of every computer database con-
`taining basic loan conditions (e.g., term of loan,
`fixed or floating rate, etc.), information used to
`determine APRs, or any other variables for
`2004 HMDA reportable loans”;
`• A list and explanation of every HMDA-report-
`able loan product; and
`“All policies and procedures concerning the cir-
`cumstances under which the APR offered to a
`loan applicant may depart (upward or down-
`ward) from the rate determined by application
`of any formulas or algorithms referenced
`above, and all policies and procedures concern-
`ing approval and monitoring of the origination
`of such loans.”
`E.g., JA174a-175a. In later conversations, petitioner’s
`office advised that these requests represented “only
`
`•
`
`•
`
`
`
`
`
`6
`
`the first stage” of the inquiry, and that petitioner “an-
`ticipated requesting substantial additional documents
`and information as [the] inquiry continued.” JA46a.
`All banks are required to disclose HMDA data to
`the public on request, 12 C.F.R. § 203.5(c), and the na-
`tional banks that received inquiry letters produced that
`data as requested. JA36a, JA127a. The banks declined,
`however, to produce other information concerning their
`loan practices and specific credit decisions, on the
`ground that petitioner’s request for such information
`amounted to an exercise of supervisory or “visitorial”
`power that the National Bank Act reserves to the
`Comptroller. JA36a, JA55a. One bank explained that
`petitioner’s request for detailed lending information
`was typical of requests it would expect to receive in
`connection with examination by OCC. JA55a. Another
`informed OCC of petitioner’s request, pursuant to OCC
`Advisory Letter 2002-9 (JA77a-86a), and offered to re-
`spond to any additional requests for information from
`OCC in connection with OCC’s own ongoing review and
`analysis of the bank’s HMDA data. See JA45a, JA77a,
`JA85a-86a.
`In May 2005, petitioner’s office told one bank that it
`was in “ongoing discussions” with OCC regarding “ju-
`risdictional issues,” but that petitioner would “‘proba-
`bly’” subpoena information the bank had not provided.
`JA45a-46a. In June, the office advised that petitioner
`had reached no agreement with the Comptroller; that
`the office “was committed to continuing its inquiry”;
`and that unless the bank provided the information, pe-
`titioner would either issue an administrative subpoena
`or file a state lawsuit “‘within the next few days.’”
`JA46a.
`This litigation followed.
`
`
`
`
`
`7
`
`SUMMARY OF ARGUMENT
`Since 1864, the National Bank Act has prohibited
`state officials from exercising “visitorial powers” over
`national banks unless authorized to do so by federal
`law. 12 U.S.C. § 484. That statutory prohibition by it-
`self bars the investigation petitioner sought to under-
`take into pricing decisions made by national banks in
`making real estate loans—a banking activity expressly
`authorized by federal law. Id. § 371(a). In addition,
`OCC has promulgated a regulation implementing § 484
`in a way that, if valid, bars petitioner’s state enforce-
`ment proceedings. That regulation was issued after full
`notice and comment, rests on a reasonable (indeed, cor-
`rect) interpretation of the statute, falls well within
`Congress’s delegation of authority to the Comptroller,
`and is entitled to deference.
`I. This Court considered § 484’s “visitorial powers”
`language just two years ago, concluding that it prohib-
`ited state officials from exercising “examination and
`enforcement authority over mortgage lending, or any
`other banking business done by national banks.”
`Watters v. Wachovia Bank, N.A., 550 U.S. 1, 14-15
`(2007). That conclusion is consistent with the text and
`purposes of the National Bank Act, including historical
`understandings of the terms that Congress used in
`making clear its intention to bar any “[d]iverse and du-
`plicative superintendence of national banks’ engage-
`ment in the business of banking.” Id. at 13-14.
`The point is confirmed by Congress’s later consid-
`eration and amendment of what is now § 484 and re-
`lated provisions. In the statute, Congress added spe-
`cific exceptions allowing “visitorial” access to banks by
`Congress itself and by States in limited circumstances
`relating to state unclaimed-property or escheat laws.
`
`
`
`
`
`8
`
`12 U.S.C. § 484(a), (b). It considered proposals to cre-
`ate further exceptions for the specific purpose of allow-
`ing state enforcement of state consumer-protection or
`fair-lending laws, but it enacted no such measure. To
`the contrary, when Congress authorized interstate
`branch banking in 1994, it expressly addressed the en-
`forcement of such state laws, but in doing so carefully
`preserved the historical division of enforcement author-
`ity between state officials (as to branches of state
`banks) and the federal Comptroller (as to branches of
`national banks).
`This understanding of the statute makes sense, be-
`cause subjecting national banks to discretionary inves-
`tigation and enforcement decisions by multiple concur-
`rent regulators would be “unduly burdensome and du-
`plicative,” Watters, 550 U.S. at 11, and “confusion would
`necessarily result,” Easton v. Iowa, 188 U.S. 220, 232
`(1903). Moreover, the public-prosecutor model of en-
`forcement typified by petitioner’s investigation here is
`incompatible with (and less effective than) the continu-
`ous and penetrating, but typically private, supervision
`process used by OCC.
`Nothing in First National Bank in St. Louis v.
`Missouri, 263 U.S. 640 (1924), or any other decision of
`this Court supports petitioner’s contrary reading of
`§ 484.
`II. OCC’s regulation implementing the Act’s “visi-
`torial powers” restrictions, 12 C.F.R. § 7.4000, also bars
`petitioner’s proposed enforcement actions. The regula-
`tion was promulgated (and then amended) after public
`notice and comment, pursuant to the Comptroller’s
`broad authority to prescribe rules to carry out the re-
`sponsibilities of his office. It fulfills a paradigmatic
`agency function, reasonably resolving any ambiguity as
`
`
`
`
`
`9
`
`to the definition and scope of statutory terms. See, e.g.,
`Smiley v. Citibank (S.D.), N.A., 517 U.S. 735, 740-741
`(1996). Like the regulation that defined “interest” in
`the National Bank Act provision at issue in Smiley,
`which displaced any otherwise applicable state regula-
`tion of the “interest” charged by national banks, OCC’s
`regulation construes the substantive terms of § 484 and
`clarifies its limitations on state enforcement. As in
`Smiley, the regulation is entitled to deference so long
`as its implementation of the statute is reasonable, as it
`plainly is.
`None of petitioner’s arguments warrants any de-
`parture from ordinary principles of deference. There is
`no presumption against preemption in a case involving
`state efforts to regulate national banks, which have
`been under federal dominion since Congress first cre-
`ated them in 1864. For the same reason, OCC’s reason-
`able implementation of the Act does not shift the fed-
`eral-state balance, or approach the constitutional limits
`of Congress’s authority. There is no basis for requiring
`Congress to speak any more plainly than it already has,
`in § 484 and in its broad grant of general rulemaking
`authority, in order to authorize the adoption of § 7.4000.
`Finally, there is no force to petitioner’s various ar-
`guments for denying deference because § 7.4000, like
`§ 484, has preemptive effect. The regulation falls well
`within OCC’s delegated rulemaking authority. It both
`resolves any arguable ambiguity in the statute’s own
`terms and reflects the agency’s unique expertise in the
`supervision of national banks. Whatever might be true
`of a regulation that “declares the preemptive scope of a
`federal statute” (Pet. Br. 48) in the sense of merely as-
`serting the legal conclusion of preemption, this regula-
`tion interprets and implements the express terms of a
`statute that all agree has preemptive effect. Here, just
`
`
`
`
`
`10
`
`as in Smiley, 517 U.S. at 744, there should be no doubt
`that such a regulation is entitled to deference.
`
`ARGUMENT
`I. THE NATIONAL BANK ACT BROADLY PRECL
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