WASHINGTON (June 29, 2009) –The following is a statement from North American Securities Administrators Association President and Colorado Securities Commissioner Fred Joseph on the U.S. Supreme Court’s decision in Cuomo v. Clearing House. In March 2009, NASAA filed an amicus brief with the Court arguing that the rules of the Office of the Comptroller of the Currency do not preempt the New York Attorney General’s authority to enforce the state’s fair lending laws against national banks and their operating subsidiaries. NASAA is the oldest international organization devoted to investor protection. Its membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada and Mexico.
“Today’s decision by the U.S. Supreme Court is a victory for consumer protection. State regulators and state attorneys general all serve a critical role in protecting consumers from fraud and abuse. To the extent state regulators are precluded from exercising their enforcement powers, the public suffers. In its decision, the Court reaffirmed important consumer protections under state banking law at a time when the financial services industry requires vastly more oversight and enforcement, not less.
“In recent years, there has been a concerted effort to preempt state regulation. In the securities field, much of that effort has originated in Congress. Federal agencies have compounded the problem by extending the scope of preemption beyond congressionally intended boundaries and in ways that pose serious threats to investor and consumer protections under state law. For example, the Office of the Comptroller of the Currency (OCC) has repeatedly issued regulations that aggressively seek to preempt the states’ authority to protect consumers through licensing requirements or enforcement actions. In the case decided by the Court today, the OCC invoked one of those regulations and sought an injunction to prevent the New York Attorney General’s Office from pursuing discriminatory lending practices by various national banks and their operating subsidiaries. The Court squarely upheld the Attorney General’s right to bring enforcement actions against national banks for violations of state law.
“The Court’s decision echoes the Obama Administration’s recently introduced regulatory reform plan, which includes recommendations that preserve state and federal collaboration, ensuring that the states will have a salient role in the regulatory process.”
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Bob Webster, Director of Communications