The Connecticut Department of Banking plans to appeal a federal district court ruling in Wachovia Bank v. Burke that federal law pre-empts the authority of state officials to regulate a national bank's mortgage subsidiary."We are disappointed by the outcome," said Jim Heckman, a spokesman for the department. The U.S. District Court for the District of Connecticut decided in favor of Wachovia, ruling that the state does not have the authority to supervise Wachovia Mortgage Corp., a state-chartered mortgage lender. It denied the state's claim that the Office of the Comptroller of the Currency had abused its authority to exercise exclusive "visitorial powers," which include the power to examine the operating subsidiary, to require it to obtain a license, and to enforce its compliance with applicable state and federal laws. It concluded that the OCC's position was reasonable and must be upheld. The decision is significant because of the "groundswell of support" that Connecticut Banking Commissioner John P. Burke had received from his counterparts in other states, according to a summary judgment provided by Laurence Platt, a partner with the Washington law firm Kirkpatrick and Lockhart LLP. Banking officials and attorneys general representing 43 states and the District of Columbia joined in an amicus brief filed in support of the Commissioner.
