Federal credit unions could be subject to additional subpoenasfor information from state attorneys general as a result of a U.S.Supreme Court decision issued last week.

The high court ruled that federal law-specifically the NationalBank Act-can't be used to block or pre-empt state enforcement ofstate laws, even if that means additional regulatory burdens forfederally chartered financial institutions.

In his majority opinion, Justice Antonin Scalia wrote that theaction being challenged-a request by then-New York Attorney GeneralEliot Spitzer for information about the lending practices ofseveral national banks-didn't interfere with the rights given tothe federal government under the National Bank Act.

Scalia wrote that Spitzer wasn't exercising supervisoryauthority (which is reserved for the federal government) but wasacting as a law enforcer.

CUNA General Counsel Eric Richard said, “To the extent thatstate attorneys general feel they need to get information fromfederal credit unions, this gives federal credit unions lessleeway.”

“Fortunately, credit unions generally don't engage in the typeof practices attorneys general usually get concerned about,” hesaid. “The portions of the National Bank Act that were referencedin the opinion are broader than similar portions of the FederalCredit Union Act.”

NAFCU Associate Director of Regulatory Affairs Dillon Shea saidin a statement that the court's 5-4 decision is “interesting givenits importance on the issue of pre-emption.” He added that hisassociation is reviewing the ruling to see what impact it has onthe laws and regulations governing federal credit unions.

Justice Clarence Thomas wrote the minority opinion, whichconcurred in part and dissented in part.

He wrote that the federal government's “visitorial powers,”which include the right to examine banks, are subject to severalmeanings. But he concluded the interpretation of the law by theOffice of the Comptroller of the Currency (which regulates nationalbanks) was appropriate in this case.

The lawsuit was filed by The Clearing House Association, a banktrade association, and the Office of the Comptroller of theCurrency.

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