Financial Law
2009
Cuomo v. Clearing House Association
557 U.S. 519 (2009)
Supreme Court of the United States
Issue
Preemption, visitorial powers, and state enforcement against national banks.
Facts
The New York Attorney General sought information from national banks while investigating possible fair-lending violations. The OCC and Clearing House Association argued that the National Bank Act and OCC regulations preempted state enforcement because they interfered with exclusive federal visitorial powers.
Holding
The Court distinguished prohibited visitorial supervision from permissible judicial enforcement of state law.
Reasoning
Justice Scalia's opinion read visitorial powers as supervisory inspection and oversight, not as a complete bar on state law enforcement through courts. The state could not exercise executive visitorial authority over national banks, but it could bring judicial actions to enforce nonpreempted state law.
Why It Matters
Cuomo helps frame federalism, supervisory authority, consumer finance enforcement, and the institutional allocation of banking oversight.
Institutional Analysis
Institutional problem
The case allocates enforcement authority between federal banking supervision and state law enforcement in a system with overlapping regulatory interests.
Economic analysis
Centralization can improve uniformity and reduce duplicative compliance, while decentralized enforcement can supply additional information, experimentation, and protection against underenforcement or capture. Overlap may also produce inconsistent commands and strategic forum selection. The optimal allocation depends on externalities, expertise, and coordination mechanisms.
Alternatives and limits
Exclusive federal supervision, concurrent enforcement, referral and information-sharing, minimum federal floors, and conflict-preemption rules offer different tradeoffs. Economic federalism helps compare institutions but cannot substitute for the statutory allocation of authority interpreted by the Court.
This analytical supplement distinguishes institutional interpretation from the court’s holding and reasoning.
Research Questions
- When does concurrent enforcement correct underenforcement rather than duplicate it?
- Which coordination rules preserve local information while limiting inconsistent obligations?
Case Text and Citation
Cite the reported decision as 557 U.S. 519 (2009). The linked copy is provided for reading access and may be hosted by a court, institutional repository, or secondary case archive.
Open case text: Justia U.S. Supreme Court Center