Tougher Regulations Eyed After Bank Ruling
A ruling supporting federal regulation of national bank subsidiaries could shape congressional debate over new laws that would give more protections to consumers, according to a New York Times article.
Consumer groups had urged the U.S. Supreme Court to uphold state authority at a time when foreclosures are increasing and lenders are under increased scrutiny.
The 5-3 decision issued yesterday said a bank subsidiary should be subject to the same rules that govern national banks. The federal power to regulate cannot be impeded by state law, Justice Ruth Bader Ginsburg wrote in her majority opinion.
U.S. Rep. Barney Frank, D-Mass., told the newspaper that the decision needs a response. “We have to act on this,” he says. “The court has eliminated a whole bunch of state consumer laws with nothing to put in their place.”