U.S. Supreme Court

Case Status


Docket Number



2006 Term

Oral Argument Date

November 29, 2006


Questions Presented

1. 12 USC § 484(a) of the National Bank Act limits visitorial powers over “national banks” except as authorized by federal law . National banks are defined and created under the National Bank Act. State-chartered nonbank operating subsidiaries of national banks are created under State corporate law. The Comptroller of the Currency, by Rule 12 CFR 7.4006, made 12 USC § 484(a) equally applicable to State-chartered nonbank “operating subsidiaries” of national banks. Is the interpretation of the Comptroller of the Currency that 12 CFR 7.4006 preempts Michigan's laws regulating mortgage lending as applied to State chartered nonbank operating subsidiaries, entitled to judicial deference under Chevron USA, Inc. v Natural Resources Defense Council, 467 US 837 (1984)?

2. A national bank has been declared to be a national corporation in Guthrie v. Harkness, 199 US 148, 159 (1905). 12 CFR 7.4006 treats a State-chartered nonbank operating subsidiary of a national bank as equivalent to a national bank and, thus, as a national corporation. The Tenth Amendment to the United States Constitution is violated to the extent a statute permits the conversion of State corporations into federal ones in contravention of the laws of the place of their creation. Hopkins v. Federal Savings & Loan Ass'n v Cleary, 296 US 315, 335 (1935). Does 12 CFR 7.4006, by equating a State-chartered nonbank operating subsidiary with a national bank for purposes of federal preemption of State regulation, violate the Tenth Amendment to the United States Constitution?

Case Updates

Supreme Court upholds federal regulatory preemption of state banking laws

April 17, 2007

Agreeing with NCLC, the Supreme Court upheld a lower court ruling that the National Bank Act preempts Michigan from exercising supervisory powers over a mortgage-issuing subsidiary of Wachovia Bank. Because it decided the issue as a matter of statutory construction, the Supreme Court did not reach the regulatory preemption issue and NCLC continues to monitor the issue as it percolates in the lower courts.

U.S. Chamber files amicus brief

November 03, 2006

NCLC urged the Supreme Court to uphold a lower court ruling that regulations promulgated by the Office of the Comptroller of Currency preempt Michigan from exercising supervisory powers over a mortgage-issuing subsidiary of Wachovia Bank. Urging the high court to reject the state’s efforts to alter the legal framework governing regulatory preemption, NCLC argued federal preemption of state and local law -- which is supported by the Supremacy Clause of the U.S. Constitution -- is exceedingly common, highly beneficial to companies that operate in a national economy, and poses no threat to federalism.

Case Documents