On December 22, 2017, four Democratic Senators, Dianne Feinstein (D-CA), Kamala Harris (D-CA), Elizabeth Warren (D-MA) and Richard Blumenthal (D-CT), introduced a bill titled the “Accountability for Wall Street Executives Act of 2017.” The bill amends the Revised Statutes, 12 U.S.C. § 484, to arm state attorneys general and other law enforcement officers with the power to issue subpoenas to investigate and examine national banks.
Specifically, the bill amends 12 U.S.C. § 484 by inserting language that would:
- Permit authorized state auditors and examiners to review banks’ records to ensure compliance with unclaimed property and escheat laws;
- Permit state attorneys general and chief law enforcement officers to issue subpoenas and examine national banks and officers of national banks upon reasonable belief that the bank or officer violated state law; and
- Require national banks to submit aggregate loan data and other appropriate information to the state attorneys general and law enforcement officers.
Senator Blumenthal provided context to the bill, explaining that it creates an “essential partnership … between state and federal officials” by “clos[ing] a loophole in financial protection oversight to allow state attorneys general to combine forces with federal law enforcement to prevent the type of abuse and immorality by Wall Street.”
This bill is significant because it not only is posed to provide state attorneys general with oversight capabilities of national banks, possibly aimed at closing an enforcement gap should the Consumer Financial Protection Bureau’s enforcement capacity diminish, but also would overturn the U.S. Supreme Court’s 2009 decision in Cuomo v. Clearing House Ass’n, LLC, 557 U.S. 519 (2009). There, the Supreme Court held that state attorneys general could not enforce laws against national banks, a ruling the Accountability for Wall Street Executives Act of 2017 would necessarily overturn.
The bill is reported to have received support from the Democratic Attorney General Association, Public Citizen, Center for Responsible Lending, and the National Consumer Law Center.
LenderLaw Watch will report on future developments should the bill, however unlikely, progress through the current Republican-run Congress.