New England Legal Foundation
  • Home
  • About
    • Mission & History
    • Annual Reports
    • Board of Directors
    • State Advisory Councils >
      • Connecticut
      • Maine
      • Massachusetts
      • New Hampshire
      • Rhode Island
      • Vermont
    • Trustees
    • Members
    • Staff
    • Job & Internship Opportunities
  • News & Events
  • Docket
  • Briefs
  • Donate
  • Contact

Watters v. Wachovia Bank, N.A. and Wachovia Bank, N.A. v. Burke

6/7/2007

 
Opposing Duplicative State Regulation of a National Bank Subsidiary

Agreeing with Wachovia and NELF, the Supreme Court held in a decision rendered on April 17 in the Watters case that Wachovia’s mortgage business, whether conducted by the bank itself or through its wholly owned operating subsidiary, is subject to federal superintendence under the National Bank Act, 12 U.S.C. § 1 et seq. (“NBA”), and not to the regulations of the several states in which the subsidiary operates.  It has long been established that the NBA preempts duplicative or conflicting state regulation of national banks themselves.  Wachovia argued for extension of federal preemption to its wholly owned subsidiary based in part on 12 C.F.R. § 7.4006, a regulation of the Office of the Comptroller of the Currency (“OCC”) which provides that “[u]nless otherwise provided by Federal law or OCC regulation, State laws apply to national bank operating subsidiaries to the same extent that those laws apply to the parent national bank.”  

NELF filed a merits amicus brief in support of Wachovia concentrating on the reasonableness prong of the federal preemption analysis of Chevron, USA, Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984), in order to counteract Michigan’s argument that state regulation of national banks’ mortgage subsidiaries is required to prevent abuses like “predatory lending.”  NELF argued that (1) duplicative state and federal regulation is economically inefficient and (2) constitutional history demonstrates the importance of the Supremacy Clause as part of the system of checks and balances in our federal system.  

Justice Ginsburg wrote the majority opinion (joined by Justices Alito, Breyer, Kennedy, and Souter) holding that, while state law may govern issues related to incorporation of a national bank’s subsidiaries, it does not govern the “business of banking” conducted by those entities.  Justice Stevens filed a dissenting opinion joined by Chief Justice Roberts and Justice Scalia (Justice Thomas taking no part in the case), arguing that the majority opinion improperly found preemption based, in the dissenters’ view, on an OCC regulation rather than an explicit federal statute.  On April 27 the Court denied the Connecticut Banking Commissioner’s petition for certiorari in the case of Wachovia Bank, N.A. v. Burke, which raised this same preemption issue and in which NELF had filed a similar amicus brief with the Court of Appeals for the Second Circuit.


Comments are closed.

    The Docket

    To obtain a copy of any of NELF's briefs, contact us at info@nelfonline.org.

    Categories

    All
    1st Circuit Court Of Appeals
    2nd Circuit Court Of Appeals
    3rd Circuit Court Of Appeals
    Business Litigation Session
    CT
    CT Superior Court
    CT Supreme Court
    Employer Employee Relationships
    February 2018
    February 2019
    Government Regulation/Administration Of Justice
    MA
    MA Appeals Court
    MA Division Of Administrative Law Appeals
    March 2015
    MA Superior Court
    MA Supreme Judicial Court
    MA US District Court
    ME
    ME Supreme Judicial Court
    NH
    NH Supreme Court
    Property Rights
    RI
    RI Supreme Court
    SCOTUS
    United States Supreme Court
    US Court Of Appeals Federal Circuit
    US District Court ME
    VT
    VT Supreme Court

    RSS Feed

    Archives

    August 2020
    June 2020
    January 2020
    June 2019
    April 2019
    October 2018
    June 2018
    February 2018
    October 2017
    October 2016
    June 2016
    February 2016
    October 2015
    June 2015
    March 2015
    October 2014
    June 2014
    February 2014
    October 2013
    June 2013
    February 2013
    October 2012
    June 2012
    February 2012
    October 2011
    June 2011
    February 2011
    October 2010
    June 2010
    February 2010
    October 2009
    February 2009
    October 2008
    June 2008
    February 2008
    October 2007
    June 2007
    October 2006
    June 2006
    February 2006
    October 2005
    June 2005
    February 2005
    October 2004
    June 2004
    February 2004
    October 2003
    May 2003
    February 2003
    September 2002
    May 2002
    February 2002
    May 2001