OCC 'Overreaching,' CT AG Says

The Office of the Comptroller of the Currency is "overreaching" in its claims that the mortgage subsidiaries of national banks are exempt from state licensing, audits, and enforcement actions, according to Connecticut Attorney General Richard Blumenthal.At a Dec. 18 hearing before a U.S. district court in New Haven, Conn., the AG will be arguing that Wachovia Mortgage is subject to Connecticut laws and regulations even though it is a subsidiary of a national bank. "A careful analysis under the standards governing pre-emption demonstrates that Congress did not intend to pre-empt state authority over state-chartered subsidiaries, such as Wachovia Mortgage," according to a motion for summary judgment filed by the state AG in Wachovia Mortgage v. John Burke. (Mr. Burke is the state banking commissioner.) The Connecticut AG is also supposed to argue that the OCC's legal interpretations and regulations represent a "bootstrapping effort" to shield national banks and their subsidiaries from compliance with state consumer protection laws. "In light of OCC's overreaching, no deference should be afforded its interpretations of the National Bank Act," the motion says.