Supreme Court Finds OCC Has Exclusive Supervisory Authority For National Bank Operating Subsidiaries
|April 23, 2007|
|Watters vs. Wachovia Bank N.A. [pdf]|
Supreme Court Votes 5-3 That OCC Has Exclusive Supervisory Authority For National Bank Operating Subsidiaries
In a split 5-3 decision, the U.S. Supreme Court issued a ruling on Tuesday that upheld preemption of state laws for the operating subsidiaries of national banks. The court ruled that a national bank’s mortgage business, whether conducted by the bank itself or through the bank’s operating subsidiary, is subject to oversight by the Office of the Comptroller of the Currency and not to state licensing, reporting or visitorial regimes.
In the case, Watters vs. Wachovia Bank N.A., the bank sued the Michigan Office of Financial and Insurance Services when Banking Commissioner Linda A. Watters sought to enforce a state licensing requirement on the bank’s mortgage subsidiary. Watters had appealed a decision in favor of preemption by the U.S. Court of Appeals for the 6th Circuit to the Supreme Court.
Please select the Related Document to view the full text of the Supreme Court opinion.