Cuomo v. Clearing House Assn., L. L. C. - Oral Argument - April 28, 2009

Cuomo v. Clearing House Assn., L. L. C.

Media for Cuomo v. Clearing House Assn., L. L. C.

Audio Transcription for Opinion Announcement - June 29, 2009 in Cuomo v. Clearing House Assn., L. L. C.

Audio Transcription for Oral Argument - April 28, 2009 in Cuomo v. Clearing House Assn., L. L. C.

John G. Roberts, Jr.:

We will hear argument next in Case 08-453, Cuomo v. The Clearing House Association.

Ms. Underwood.

Barbara D. Underwood:

Thank you, Mr. Chief Justice, and may it please the Court: Under the OCC regulation at issue here, State antidiscrimination and consumer protection laws can be enforced against national banks by the Federal OCC and by private parties, but not by State attorneys general.

This unusual enforcement pre-emption, which detaches the State's power to make laws from its power to enforce them, was not written into the National Bank Act by Congress in 1864, and it's implausible that Congress implicitly delegated to OCC the power to read it in now.

We know the NBA did not in 1864 enact enforcement pre-emption against the States for three reasons: First, the words of the statute; second, a long line of cases from this Court, especially St. Louis, upholding the power of the State to enforce laws against a national bank or rejecting it on the ground that the law was substantively pre-empted, but not questioning the power of the State to enforce a valid law; and, finally, the wholly anomalous character, foreign really to our structure of government, of separating the power to make law from the power to enforce it.

Ruth Bader Ginsburg:

But to some extent, would you concede that interpretation; that is, not only the attorney general under New York's law, but the superintendent of banks as well, has authority over mortgage lending?

Would -- would you agree that the part about the bank superintendent's enforcement could not be enforced against national banks?

Barbara D. Underwood:

Well, first of all, the bank superintendent in New York doesn't have authority over national banks.

It has authority only over State banks, as we pointed out in our reply brief.

So we don't assert that authority.

I would say that the -- and the injunction doesn't run -- that's at issue in this case, doesn't run against the superintendent.

It runs against the attorney general.

But I would say--

Ruth Bader Ginsburg:

But there is -- the provision that you are talking about, 296(a), concerns the authority of the bank superintendent as well as the authority of the attorney general; isn't that so?

Barbara D. Underwood:

--I believe that the banking superintendent does not assert authority to enforce in a regulatory fashion against national banks.

If they did, if -- if -- if the bank superintendent asserted a chartering or licensing supervisory regime, that would be a different issue from the question--

Ruth Bader Ginsburg:

Just with respect to the same issue on mortgage lending where there's a concern about racial discrimination?

Barbara D. Underwood:

--Well, the -- the bank -- the banking superintendent of New York does not enforce against national banks.

Ruth Bader Ginsburg:

Anything?

And you agree to that?

Barbara D. Underwood:

Yes, that is right.

Ruth Bader Ginsburg:

Even if the New York statute--

Barbara D. Underwood:

Read differently or interpreted or applied differently.

What's at issue here is a distinction between a supervisory regime -- "visitation" is a regime characterized by routine examinations, no cause needed, by a chartering or a licensing authority for the purpose of enforcing limitations on--

Stephen G. Breyer:

How is it supposed to work?

This is what is bothering me at the heart of this case.

I imagine that banks, particularly right in these last few months, are in situations where there are three categories of -- of borrowers.

One might be a category of people whom you are reasonably confident in, and the second is a category of people who are borderline or less so, and there are also minorities.

Now, where you make the decision as a bank to deny them the loan, it sometimes is difficult to say whether that decision was made for a discriminatory reason, namely race, or for a legitimate reason, namely because this was a person unlikely to pay the money back.

Now, how is a bank to function if 50 different attorneys general plus the Federal agencies all look at the books of the bank to look at the individual loan and to make that kind of determination about which quite honestly reasonable people will often differ?