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Court deals N.Y. loss over bank lending probe
Northwestern Financial Review, Jan 1-Jan 14, 2008
New York state does not have the legal authority to investigate the residential lending practices of national banks including Wells Fargo & Co. and JPMorgan Chase & Co., a federal appeals court ruled on Dec. 4. The Manhattan-based L'.S. 2nd Circuit Court of Appeals upheld a lower court ruling that said federal law gives the Office of the Comptroller of the Currency exclusive regulatory authority over national banks and bars New York's probe of their lending practices.
It is "beyond genuine dispute that state law may not significantly burden a national bank's own exercise of its real estate lending power," the court said. "This represents a complete and total victory for federal pre-emption," said Andrew Sandler of Skadden, Arps, Slate, Meagher & Flom, who has represented some of the banks under scrutiny.
Copyright NFR Communications Inc Jan 1-Jan 14, 2008
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