June 30, 2009

John Cooney quoted in the New York Times, Washington Post, Associated Press and numerous major media outlets on Supreme Court preemption case

3 min

John F. Cooney, a partner in Venable's Banking and Financial Services Practice Group, was quoted extensively in multiple national media articles on the June 29th U.S. Supreme Court decision on Cuomo v. Clearing House. The decision, which allows states some consumer protection enforcement over national banks, said that states can investigate national banks for discrimination and other crimes, but only with a court's help.

Cooney was quoted in the Associated Press, New York Times, Washington Post and American Banker, among others. The Associated Press story featuring Cooney's comments was picked up by hundreds of media outlets, including The Chicago Tribune, Los Angeles Times, The Boston Globe and The Money Times. The Washington Post story was also picked up across the country.

According to the AP story, the Supreme Court ruled that a state attorney general cannot on his own issue a subpoena against a bank that has branches in that state and others. However, the court said national banks are subject to some state laws under the National Banking Act, and an attorney general can go to court to enforce those laws.

Cooney had the lead comment in the Associated Press story. "What this decision today says is that states have the ability to enforce their own laws (against national banks) as long as they follow state due process procedures, which generally mean issuance of a subpoena which can be challenged in court."

Cooney, a former deputy general counsel for litigation and regulatory affairs at the Office of Management and Budget, told the New York Times that the decision upholds the theme of federalism that has run through several important cases of this just-ended Supreme Court term. He added that the banking decision would now require action by the legislative branch. "People are going to go to Congress and say, 'You need to give us a functioning principle' to define the boundaries of state and federal law," he said. "The ultimate court of appeal will be Congress."

The Washington Post article featured Cooney's comments on what this ruling means for state agencies' regulation over national banks. "States were precluded from going forward to enforce consumer protection laws against banks," said Cooney. "Now they have the green light to move forward in consumer protection and a lot of other areas."

According to the American Banker story, Monday's ruling could open the floodgates for lawsuits from state attorneys general and bolster momentum for President Obama's regulatory restructuring plan. "What this litigation has done is, it has changed the burden of inertia on the national bank and the OCC to go to Congress to change," said Cooney. "The person that has to seek a change is always at a disadvantage [compared with] one that has to protect the status quo."