Visitation

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OCC

Interpretations - OCC - National banks

In general

Only the OCC may exercise visitorial powers with respect to a national bank, such as conducting examinations, inspecting or requiring the production of books or records, or prosecuting enforcement actions. For that reason, except in the limited circumstances in which federal law grants express special authority to a state or other federal official, national banks have only one regulator, the OCC 12 CFR 7.4000; National State Bank, Elizabeth, New Jersey v Long, 630 F2d 981 (3d Cir 1980); and to First Union National Bank v Burke, 48 F Supp 2d 132 (D Conn 1999)

Specific instances

When available, links are provided to primary sources. Please note, however, that in some cases such primary sources are not available in electronic format

For example, OCC Interpretive Letters are only available electronically beginning with Letter No 720 1.26.96
Corporate Decisions beginning with Letter No. 96-20 4.12.96

When such primary source is not available electronically, the source utilized is the OCC's annual publication "Activities Permissible for a National Bank"

New York law permitting state inspection of books and records of a national banks insurance agency to determine compliance with applicable state law is not preempted

Provisions of the Iowa Uniform Securities Act requiring national banks performing discount brokerage activities to register with the state, and providing for state examination, are preempted
Portions of the Nebraska Securities Act requiring national banks performing securities brokerage activities to register, and providing for state examination, are preempted

Idaho, Wisconsin, and Wyoming. Portions of the Idaho Credit Code (requiring credit card issuers, including national banks, to obtain licenses to issue credit cards to Idaho residents, and to be subject to visitation or enforcement by state officials), the Wisconsin Consumer Act (requiring national banks making certain consumer credit transactions to comply with notification requirements and to submit to visitation and enforcement by state officials), and the Wyoming Uniform Consumer Credit Code (containing similar visitation and enforcement provisions) are preempted

A subpoena issued by the Texas House of Representatives seeking national bank books and records represents an attempted exercise of visitorial powers by state authorities and is therefore preempted

OCC filed suit against the State of New York Attorney General (NYAG) in District Court seeking injunctive relief to prevent the NYAG from interfering with the OCCs exclusive visitorial authority over the banking activities of national banks and their operating subsidiaries. On the same day, the New York Clearing House filed a similar suit for injunctive relief against the New York Attorney General. On October 12, 2005, the Court issued an opinion and order granting the OCC the requested injunctive relief. The Court found that Attorney General Eliot Spitzers assertion of authority to investigate the real estate lending practices of national banks and their operating subsidiaries and to enforce their compliance with state law conflicts with 12 USC 484, as implemented by 12 CFR 7.4000, and therefore, is preempted by federal law. In the related case by the Clearing House, the Court granted plaintiff the same injunctive relief granted to the OCC and further relief prohibiting the Attorney General from bringing an action under the Fair Housing Act in the states parens patriae capacity to enforce the FHAs fair lending provisions against the Clearing Houses national bank members or their operating subsidiaries. On November 4, 2005, Eliot Spitzer filed appeals in both actions

Three US courts of appeals and the US district court for Maryland ruled that states are not permitted to require licenses from or exercise visitorial powers over the operating subsidiaries of national banks. In each case, the courts held that the National Bank Act and OCC regulations preempt state licensing and enforcement authority over the real estate lending activities of national bank operating subsidiaries. The Second, Sixth, and Ninth Circuits affirmed district court decisions handed down in 2004
See Wachovia Bank, N A v Burke, 414 F3d 305 (2d Cir 2005;
Wachovia Bank, NA v Watters, 431 F3d 556 (6th Cir 2005); and
Wells Fargo v Boutris, 419 F3d 949 (9th Cir 2005). The decision of US district court in National City Bank of Indiana v Turnbaugh, 367 F Supp 2d 805 (D Md 2005), is pending appeal in the Fourth Circuit. National City Bank of Indiana v Turnbaugh, No 05-1647 (4th Cir. appeal docketed 6.13.05)

An interpretive letter explains OCC supervision of operating subsidiaries of national bank and the applicability of state law to operating subsidiaries. See OCC Interpretive Letter No 971. In two separate decisions, a U.S. District Court held that only the OCC may exercise visitorial authority over the operating subsidiary of a national bank, and that the Depository Institutions Deregulatory and Monetary Control Act (DIDMCA) preempts state law that prohibits a home mortgage lender from receiving interest for more than one day prior to the date that the mortgage is recorded

An operating subsidiary of a national bank is not required to be licensed under California law in order to engage in mortgage lending in the state. See OCC Interpretive Letter No 957

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