The National Association of Realtors and New York State Association of Realtors on Monday filed a brief with the U.S. Court of Appeals that relates to state authority over national banks.
The Realtors trade group has aggressively fought to block the entry of major national banks into the business of real estate brokerage, and the court brief is in step with the group’s desire to check the powers of national banks.
The state and national Realtor trade groups support the reversal of an earlier decision in which a U.S. district court in New York concluded that the Office of the Comptroller of the Currency acted within its authority in interpreting federal law to prohibit New York Attorney General Eliot Spitzer from enforcing state anti-discriminatory lending laws against national banks. That decision, in the case of The Clearing House Association LLC and Office of the Comptroller of the Currency v. Spitzer, “would require the OCC to interpret state law, which is well beyond the OCC’s mandate. It is the state’s chief legal officer who has the requisite expertise to interpret state law,” the Realtor groups state in the court brief.
“The decision … should be overturned because state enforcement of state anti-discrimination laws does not prevent, obstruct or significantly interfere with the ability of national banks to engage in mortgage lending. Congress has not delegated exclusive authority to the OCC to enforce national banks’ compliance with applicable law. Rather, congress has granted multiple authorities supervisory and enforcement authority over national banks,” the brief states.
“In view of the multiple agencies that are authorized to supervise national banks, it is simply not the case that permitting states to exercise jurisdiction over national banks will obstruct, condition or interfere with their ability to exercise their powers. The OCC does not dispute the applicability of the state of New York’s anti-discrimination law to national banks. At issue, however, is whether the OCC can usurp the authority of a state to enforce its local anti-discrimination laws against national banks.”
The trade groups also argue that the state has the authority “to access information across all sectors of the real estate industry, including mortgage lending, in a form that enables state authorities to analyze potentially discriminatory practices of participants in real estate transactions, including mortgage lenders, in the context of the entire real estate lending market,” and that the state “is best equipped to make appropriate policy decisions about issues affecting state residents.”
The National Association of Realtors has also raised issues about banks that have invested in real estate projects, such as condos and hotels. In response, John C. Dugan, comptroller of the currency, said in a statement in February that he has no intention to expand the OCC’s “limited authority” to breach the separation of banking and Congress.