No. 08-453
In the Supreme Court of the United States
ANDREW M. CUOMO, ATTORNEY GENERAL OF
NEW YORK, PETITIONER
v.
THE CLEARING HOUSE ASSOCIATION, L.L.C., ET AL.
ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
BRIEF FOR THE FEDERAL RESPONDENT
ELENA KAGAN
Solicitor General
Counsel of Record
MALCOLM L. STEWART
Deputy Solicitor General
MATTHEW D. ROBERTS
Assistant to the Solicitor
General
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
JULIE L. WILLIAMS
First Senior Deputy
Comptroller and Chief
Counsel
DANIEL P. STIPANO
Deputy Chief Counsel
HORACE G. SNEED
DOUGLAS B. JORDAN
Attorneys
Office of the Comptroller of
the Currency
Washington, D.C. 20219
QUESTION PRESENTED
Whether the Office of the Comptroller of the Cur rency (OCC) reasonably interpreted 12 U.S.C. 484(a), which generally precludes governmental actors other than OCC from exercising "any visitorial powers" over national banks, to prohibit the New York Attorney Gen eral from demanding national bank records and from filing suit to enforce compliance by national banks with the State's fair lending laws.
In the Supreme Court of the United States
No. 08-453
ANDREW M. CUOMO, ATTORNEY GENERAL OF
NEW YORK, PETITIONER
v.
THE CLEARING HOUSE ASSOCIATION, L.L.C., ET AL.
ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
BRIEF FOR THE FEDERAL RESPONDENT
OPINIONS BELOW
The opinion of the court of appeals (Pet. App. 1a-62a) is reported at 510 F.3d 105. The opinions of the district court (Pet. App. 63a-117a, 118a-142) are reported at 396 F. Supp. 2d 383 and 394 F. Supp. 2d 620.
JURISDICTION
The judgment of the court of appeals was entered on December 4, 2007. A petition for rehearing was denied on June 5, 2008 (Pet. App. 143a-144a). On August 26, 2008, Justice Ginsburg extended the time within which to file a petition for a writ of certiorari to and including October 3, 2008. The petition was filed on that date and was granted on January 16, 2009. The jurisdiction of this Court rests on 28 U.S.C. 1254(1).
STATEMENT
1. The Office of the Comptroller of the Currency (OCC) is responsible for administering the National Bank Act (NBA or Act), 12 U.S.C. 21 et seq. OCC's chief officer, the Comptroller of the Currency, is authorized "to prescribe rules and regulations to carry out the re sponsibilities of the office." 12 U.S.C. 93a. OCC is au thorized to initiate enforcement proceedings if it con cludes that a national bank is not in compliance with any applicable state or federal law regulating the business of banking. 12 U.S.C. 1818(b).
The NBA was enacted in 1864 to create a national banking system and to protect it from potentially hostile action by the States. Tiffany v. National Bank, 85 U.S. (18 Wall.) 409, 412-413 (1874). "To prevent inconsistent or intrusive state regulation from impairing the national system," Watters v. Wachovia Bank, N.A., 550 U.S. 1, 11 (2007), the NBA provides that "[n]o national bank shall be subject to any visitorial powers except as authorized by Federal law, vested in the courts of justice or such as shall be, or have been exercised or directed by Con gress or by either House thereof or by any committee of Congress or of either House duly authorized." 12 U.S.C. 484(a). An additional exception permits "lawfully authorized State auditors and examiners" to "review [a bank's] records solely to ensure compliance with applicable State unclaimed property or escheat laws." 12 U.S.C. 484(b).1
Through notice and comment rulemaking, OCC has promulgated 12 C.F.R. 7.4000, which interprets Section 484. 69 Fed. Reg. 1895 (2004); 68 Fed. Reg. 6363 (2003); 64 Fed. Reg. 60,092 (1999); 64 Fed. Reg. 31,479 (1999). The regulation defines the term "visitorial powers" to include "(i) [e]xamination of a bank; (ii) [i]nspection of a bank's books and records; (iii) [r]egulation and supervi sion of activities authorized or permitted pursuant to federal banking law; and (iv) [e]nforcing compliance with any applicable federal or state laws concerning those activities." 12 C.F.R. 7.4000(a)(2). The regulation also clarifies the meaning of the statutory exception that permits the exercise of visitorial powers "vested in the courts of justice." 12 U.S.C. 484(a). The regulation states that the exception "pertains to the powers inher ent in the judiciary," such as the authority to issue dis covery orders and subpoenas, "and does not grant state or other governmental authorities any right to inspect, superintend, direct, regulate or compel compliance by a national bank with respect to any law, regarding the content or conduct of activities authorized for national banks under Federal law." 12 C.F.R. 7.4000(b)(2).
2. Various federal laws prohibit discrimination in lending on the basis of race and other protected grounds. See, e.g., Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691 et seq.; Fair Housing Act (FH Act), 42 U.S.C. 3601 et seq. Many States, including New York, have enacted laws that substantially parallel those federal anti-discrimination provisions. New York Executive Law § 296-a is that State's counterpart to ECOA. Pet. App. 3a & n.3; N.Y. Exec. Law. § 296-a(1) (McKinney 2005).
The Home Mortgage Disclosure Act of 1975 (HMDA), 12 U.S.C. 2801 et seq., requires lenders mak ing loans secured by residential real property to compile and make publically available information about their mortgage lending activities. 12 U.S.C. 2803. Required disclosures include applicants' race, ethnicity, gender, and income, and, for certain loans, the interest rate charged. Ibid. Because HMDA data do not capture all information necessary for prudent underwriting and pricing, HMDA data alone cannot establish unlawful lending discrimination. 59 Fed. Reg. 18,270 (1994); OCC, Frequently Asked Questions About the New HMDA Data 5-6 (Apr. 3, 2006) (HMDA Data Questions) <http://www.occ.treas.gov/ftp/release/2006-44a.pdf>. Consideration of additional information-such as credit history scores, borrower debt-to-income ratios, and loan-to-property-value ratios-may indicate that differ ential pricing or other differential treatment reflects prudent lending practices rather than unlawful conduct. Ibid.
In order to determine whether a bank has engaged in unlawful discrimination in its lending activities, OCC employs a program involving fair lending risk assess ment, risk screening using sophisticated modeling tech niques, and on-site examinations. If OCC determines that a bank has violated fair lending laws or that its practices are potentially discriminatory, OCC will order the bank to cease the discriminatory practices, take nec essary remedial action to redress harm to borrowers, and make referrals to the United States Department of Justice and notifications to the Department of Housing and Urban Development, as appropriate. 15 U.S.C. 1691e(g) and (k); 59 Fed. Reg. at 18,272-18,274; OCC, Fair Lending Examination Procedures 9 (Apr. 2006).
3. In March 2005, four national banks that are mem bers of the Clearing House Association, a trade associa tion of financial institutions, disclosed HMDA data for 2004. Shortly thereafter, the New York State Attorney General's office sent "letters of inquiry" to the banks. Pet. App. 3a. The letters asserted that the HMDA data indicated racial disparities in loan pricing between white borrowers and African-American and Hispanic borrow ers. Ibid. The letters further stated that the dispari ties, "unless legally justified[,] may violate federal and state anti-discrimination laws such as [ECOA] and its state counterpart, New York State Executive Law § 296-a." Ibid. "In lieu of issuing a formal subpoena," the letters requested certain non-public information concerning the banks' lending activities, including data on real estate loans made in the State. Id. at 3a-4a. The Attorney General's office claimed authority to demand the requested bank records under New York Executive Law § 63(12), which empowers the Attorney General to issue civil subpoenas. Pet. App. 69a.
In June 2005, respondents (OCC and the Clearing House Association) each filed a complaint in federal dis trict court seeking declaratory and injunctive relief against petitioner, the New York State Attorney Gen eral. Respondents contended that petitioner's demand for bank records and his threatened enforcement actions constituted a prohibited exercise of visitorial powers over national banks. Pet. App. 4a-5a, 66a-67a. Peti tioner filed a counterclaim in the OCC action seeking to have OCC's visitorial powers regulation declared arbi trary and capricious under the Administrative Proce dure Act, 5 U.S.C. 706. Pet. App. 5a.
The district court entered summary judgment for respondents. The court granted declaratory and injunc tive relief that barred petitioner from demanding to in spect the national banks' books and records in connec tion with his investigation and from initiating any judi cial action against national banks to enforce the State's fair lending laws. Pet. App. 63a-117a, 118a-142a. The court also denied petitioner's counterclaim challenging the validity of OCC's regulation. Id. at 114a-115a.
4. As relevant here, the court of appeals affirmed the district court's judgment. Pet. App. 1a-62a. The court of appeals observed that the parties' dispute cen tered on "the meaning of the term 'visitorial powers' in § 484(a)," and, in particular, on whether OCC's regula tory interpretation of that term is entitled to deference under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984). Pet. App. 10a. In that regard, the court noted petitioner's concession that, if OCC's definition of the term "visitorial powers" and its construction of the "courts of justice" exception were upheld, Section 484(a) would bar petitioner's investigation and threatened en forcement actions. Id. at 15a & n.6.
The court of appeals then considered and rejected petitioner's various arguments that Chevron deference should not apply. The court first rejected the contention that Chevron deference would be inconsistent with the presumption against preemption that governs in areas of regulation traditionally allocated to the States. The court explained that the presumption does not apply in the context of national bank regulation, which has been "substantially occupied by federal authority for an ex tended period of time." Pet. App. 12a (citation omitted).
The court of appeals also dismissed petitioner's con tention that Chevron deference is inappropriate because OCC's interpretation of the term "visitorial powers" invokes the outer limits of Congress's power and there fore triggers the doctrine of constitutional avoidance. Pet. App. 13a-14a. The court concluded that OCC's con struction of the disputed statutory language raises no constitutional concerns even though it prevents the States from enforcing certain state laws against national banks. The court observed that national banks are "creatures of federal statute" and that States "can exer cise no control over them, nor in any wise affect their operation, except in so far as Congress may see proper to permit." Id. at 14a (quoting Farmers' & Mechs'. Nat'l Bank v. Dearing, 91 U.S. 29, 34 (1875)). The court also rejected petitioner's argument that OCC had exceeded its rulemaking authority, explaining that 12 U.S.C. 93a gives OCC "broad authority" to promulgate regulations implementing the NBA. Pet. App. 24a.
Applying Chevron deference, the court of appeals held that OCC's regulation reflects a reasonable under standing of the term "visitorial powers" and the "courts of justice" exception. The court concluded that OCC's interpretation of "visitorial powers" is consistent with the definition this Court gave that term in Guthrie v. Harkness, 199 U.S. 148 (1905), and is supported by Watters, which made clear that "investigation and en forcement by state officials are just as much aspects of visitorial authority as registration and other forms of administrative supervision." Pet. App. 20a.
The court of appeals also concluded that OCC had reasonably construed the "courts of justice" exception as involving only "the powers inherent in the judiciary" and not as granting authority to States to "compel com pliance by a national bank" with any law concerning "the content or conduct of activities authorized for national banks under Federal law." Pet. App. 30a (quoting 12 C.F.R. 7.4000(b)(2)). The court noted that petitioner's proposed interpretation of the exception, under which States could use lawsuits to enforce regulations that could not be enforced administratively, "would swallow the rule" against the unauthorized exercise of "visitorial powers." Ibid.
The court of appeals concluded that, "[i]n drawing the lines that it did in § 7.4000(a), the OCC reached a permissible accommodation of conflicting policies that were committed to it by the statute." Pet. App. 28a. The court explained that OCC's approach "furthers Con gress's intent * * * to shield national banks 'from un duly burdensome and duplicative state regulation' in the exercise of their federally authorized powers, such as real estate lending." Id. at 28a-29a (quoting Watters, 550 U.S. at 11). "At the same time," the court observed, the challenged OCC regulation "preserves state sover eignty by leaving state officials free to enforce a wide range of laws that do not purport to regulate a national bank's exercise of its authorized banking powers." Id. at 29a.
Judge Cardamone dissented in relevant part. Pet. App. 42a-62a. He would have held that OCC's regula tory definition of the term "visitorial powers" is not enti tled to Chevron deference and that OCC's regulation is invalid because it impermissibly alters the balance be tween federal and state authority. Ibid.
SUMMARY OF ARGUMENT
The NBA prohibits governmental officials other than OCC from exercising "any visitorial powers" over na tional banks, except in limited circumstances authorized by federal law. 12 U.S.C. 484(a). The court of appeals correctly upheld OCC's regulation defining the term "visitorial powers" to include state efforts to obtain na tional bank records and to enforce state fair lending laws against national banks.
A. OCC's regulation is entitled to Chevron defer ence. This Court has repeatedly deferred to OCC inter pretations of ambiguous terms in the NBA. See, e.g., Smiley v. Citibank (South Dakota), N.A. 517 U.S. 735 (1996). The regulation at issue here was adopted, after full notice-and-comment procedures, under OCC's broad authority to promulgate regulations administering the NBA, 12 U.S.C. 93a.
B. Petitioner identifies no sound basis for withhold ing Chevron deference in this case. OCC's regulation does not alter the federal-state balance but simply pre cludes state enforcement of laws that regulate the per formance by federal instrumentalities of their federally authorized powers. For similar reasons, no presumption against preemption applies to the regulation of national banks, as to which federal authority has always been predominant.
OCC's regulation does not declare the preemptive scope of the NBA, but identifies the circumstances un der which state officials may act to enforce non-pre empted state-law provisions. The Court in Smiley de ferred to OCC's interpretation of ambiguous language in the NBA even though the practical effect of that in terpretation was to preclude the application of state laws that would have been valid under a different con struction of the NBA. 517 U.S. at 743-744. And, even if OCC's regulation were read as determining the scope of federal preemption, it would be entitled to deference. See, e.g., City of N.Y. v. FCC, 486 U.S. 57, 63-64 (1988); Fidelity Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153-154 (1982).
OCC clearly had authority to issue regulations inter preting Section 484. Section 484 is contained within a statute that OCC administers, and it addresses the cir cumstances under which national banks can be subject to supervisory and enforcement activities. OCC has consistently understood "visitorial powers" to encom pass state efforts to examine national banks, review their books and records, and enforce all applicable laws that regulate the business of banking.
C. OCC's interpretation of the term "visitorial pow ers" better reflects the NBA's text, structure, and pur poses than petitioner's alternative view that the term is limited to supervisory oversight of a bank's internal management, safety and soundness, and charter compli ance. When the NBA was enacted, the visitorial powers of the States over civil corporations included broad su pervisory authority to protect the public and to police corporate compliance with public laws. States fre quently exercised that authority through judicial actions brought by their attorneys general, and visitorial pow ers over banks were particularly broad.
OCC's interpretation is also supported by the excep tions to Section 484's general prohibition. Those excep tions confirm that "visitorial powers" are not limited to supervision of internal bank affairs and charter compli ance, but include state review of bank records to ensure the bank's compliance with more general laws, such as unclaimed property and escheat laws and state tax laws. OCC's interpretation also furthers the purposes of the NBA, which created the national banking system during the Civil War to further important goals of the federal government, and which carefully protected national banks from potentially hostile action by the States. Even when the application to national banks of state law is not substantively preempted, differences in interpre tation, enforcement priorities, or choice of remedies can interfere with uniform bank supervision and with the exercise by national banks of their federally authorized powers.
OCC's interpretation is also supported by this Court's decisions in Guthrie v. Harkness, 199 U.S. 148 (1905), and Watters v. Wachovia Bank, N.A., 550 U.S. 1 (2007), which reflect the Court's own understanding of the NBA term "visitorial powers." Indeed, in Watters, this Court concluded that Michigan laws authorizing virtually the same enforcement actions that petitioner sought to take here involved the exercise of "visitorial powers." Id. at 13-15. OCC's interpretation is further supported by other provisions of federal banking law that explicitly address the appropriate entity for enforc ing state fair lending laws against national banks. 12 U.S.C. 36(f)(1)(B).
D. Petitioner's alternative construction-that the term "visitorial powers" is unambiguously limited to supervisory oversight of a bank's safety and soundness, internal organization, and charter compliance-cannot be squared with the NBA's text, structure, and pur poses, or with this Court's precedent. Petitioner's argu ment rests on a false dichotomy between "supervisory oversight" of a national bank's safety and soundness and charter compliance, on the one hand, and enforcement of "generally applicable" laws on the other. Although New York's fair lending law is not designed specifically to ensure the safety and soundness of regulated banks, it is directed at core banking activities, and enforcement of the law necessarily entails judgments about safe and sound lending practices. OCC's interpretation of Sec tion 484, under which state officials are barred from enforcing laws of that character, does not disable the States from enforcing laws of true general applicability, such as employment-discrimination and other labor laws.
Petitioner's interpretation is not supported by First National Bank in St. Louis v. Missouri, 263 U.S. 640 (1924), or by any of the other decisions of this Court on which petitioner relies. None of those decisions men tions, much less construes, Section 484, its predecessor provisions, or the term "visitorial powers," and none of them suggests that petitioner has the power to take the investigative and enforcement actions that he threat ened in this case.
Petitioner is also mistaken in contending that OCC's interpretation would have left a significant gap in en forcement authority between 1864, when the NBA was enacted, and 1966, when Congress gave OCC authority to issue cease-and-desist orders to enforce state law. Since the NBA's enactment, OCC has been authorized to investigate whether national banks are complying with applicable state laws and to use its informal super visory authority to ensure their compliance. In addition, private parties injured by a national bank's violation of applicable state law have always been able to seek re dress in the courts. OCC currently has formal authority to enforce compliance with both state and federal fair lending laws. And OCC vigorously examines for, and enforces compliance with, fair lending requirements.
ARGUMENT
OCC'S INTERPRETATION OF THE TERM "VISITORIAL POWERS" IS SUPPORTED BY THE TEXT, STRUCTURE, AND PURPOSES OF THE NATIONAL BANK ACT AND IS ENTITLED TO CHEVRON DEFERENCE
The NBA was enacted during the Civil War to create a nationwide banking system, independent of the States and shielded from potentially hostile state actions, in order to establish a national currency and promote a strong national economy. Talbott v. Silver Bow County, 139 U.S. 438, 442-443 (1891); Tiffany v. National Bank, 85 U.S. (18 Wall.) 409, 412-413 (1874). As instrumentali ties of the federal government, federally chartered and created for a public purpose, national banks have always been subject to the paramount authority of the United States. Davis v. Elmira Sav. Bank, 161 U.S. 275, 283 (1896). Thus, from its enactment, the NBA has reflected the principle that "the States can exercise no control over" national banks "except insofar as Congress may see proper to permit." Farmers' & Mechs'. Nat'l Bank v. Dearing, 91 U.S. 29, 34 (1875).
The central question in this case is whether state officials may investigate and enforce compliance by na tional banks with state laws that regulate their federally authorized banking activities. The NBA addresses that question in its "visitorial powers" provision, which is designed "[t]o prevent inconsistent or intrusive state regulation from impairing the national [banking] sys tem." Watters v. Wachovia Bank, N.A., 550 U.S. 1, 11 (2007). That provision states that "[n]o national bank shall be subject to any visitorial powers except as autho rized by Federal law, vested in the courts of justice or such as shall be, or have been exercised or directed by Congress or by either House thereof or by any commit tee of Congress or of either House duly authorized." 12 U.S.C. 484(a). The provision contains an additional ex ception that allows "lawfully authorized State auditors and examiners" to "review [a bank's] records solely to ensure compliance with applicable State unclaimed property or escheat laws." 12 U.S.C. 484(b).
OCC has promulgated a regulation that construes the term "visitorial powers" to include state efforts to inspect national bank records and to enforce compli ance by national banks with applicable laws concern ing federally authorized banking activities. 12 C.F.R. 7.4000(a)(2). Relying on that interpretation, the district court enjoined petitioner from demanding national bank lending records or instituting judicial actions to enforce state fair lending laws against national banks. J.A. 206a-207a, 209a. The court of appeals correctly upheld that injunction and OCC's regulation. OCC's interpreta tion of the term "visitorial powers" is entitled to judicial deference and is amply supported by the text, structure, and purposes of the NBA.
A. Under Chevron, OCC's Regulatory Definition Of The Term "Visitorial Powers" Is Controlling If It Is Reason able
OCC's regulation defines "visitorial powers" to in clude "(i) [e]xamination of a bank; (ii) [i]nspection of a bank's books and records; (iii) [r]egulation and supervi sion of activities authorized or permitted pursuant to federal banking law; and (iv) [e]nforcing compliance with any applicable federal or state laws concerning those activities." 12 C.F.R. 7.4000(a)(2). Under OCC's interpretation, unless an exception applies, Section 484 prohibits state officials from demanding national bank records or enforcing compliance by national banks with state laws regulating their federally authorized banking activities, such as real estate lending.
Contrary to petitioner's contention (Br. 19-20), how ever, OCC's regulation does not equate "visitorial pow ers" with "general law enforcement." Under OCC's in terpretation, "visitorial powers" include two principal state activities. First, the term encompasses all state efforts to examine a national bank or inspect its records. 12 C.F.R. 7.4000(a)(2)(i) and (ii). Second, the term in cludes state regulatory or enforcement activities of a particular kind-those directed at an institution's bank ing activities. 12 C.F.R. 7.4000(a)(2)(iii) and (iv). The term does not encompass every state effort to enforce any state law against a national bank, but rather is lim ited to enforcement of laws "concerning" "activities au thorized or permitted pursuant to federal banking law." Ibid. Thus, States remain free to enforce applicable laws that do not regulate the content or conduct of fed erally authorized banking activities, 12 C.F.R. 7.4000(a)(3), including, for example, criminal, tax, zon ing, and labor and employment laws. See 69 Fed. Reg. 1896 (2004).2
Under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984), OCC's regulation interpreting "visitorial powers" is entitled to controlling weight if it is reasonable. As this Court recognized in Chevron, "[t]he power of an administrative agency to administer a congressionally created . . . program necessarily requires the formula tion of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress." Id. at 843 (citation omitted). Accordingly, when a statute authorizes an agency to engage in rulemaking, courts assume that "Congress would expect the agency to be able to speak with the force of law when it addresses ambiguity in the statute" through the rulemaking process. United States v. Mead Corp., 533 U.S. 218, 229 (2001). In that circum stance, a reviewing court "is obliged to accept the agency's position if Congress has not previously spoken to the point at issue and the agency's interpretation is reasonable." Ibid.
Because OCC is "the administrator charged with supervision of the [NBA]," this Court has repeatedly applied Chevron deference to OCC's interpretations of ambiguous provisions in the Act. NationsBank v. Vari able Annuity Life Ins. Co., 513 U.S. 251, 256-257 (1995) (citing Clarke v. Securities Indus. Ass'n, 479 U.S. 388, 403-404 (1987), and Investment Co. Inst. v. Camp, 401 U.S. 617, 626-627 (1971)). Indeed, the Court has stated that the Comptroller's special authority to administer the NBA warrants deference to his interpretations even when they are not adopted through notice-and-comment rulemaking or formal adjudication. Mead Corp., 533 U.S. at 230-231 & n.13 (citing NationsBank, supra). In this case, OCC's interpretation of the relevant NBA pro vision is set forth in a published regulation that was pro mulgated after full notice-and-comment procedures. 69 Fed. Reg. 1895 (2004); 68 Fed. Reg. 6363 (2003); 64 Fed. Reg. 60,092 (1999); 64 Fed. Reg. 31,749 (1999). The reg ulation was issued pursuant to the Comptroller's broad authority to prescribe rules and regulations to "carry out the responsibilities of the office," 12 U.S.C. 93a, which include administration of the NBA and other fed eral banking laws. NationsBank, 513 U.S. at 256. Ac cordingly, OCC's interpretation of the term "visitorial powers" is controlling if it is reasonable.
B. Petitioner's Arguments Against Applying Chevron Def erence Are Not Persuasive
1. OCC's regulation does not alter the federal-state bal ance
Petitioner (Br. 43-45) contends that OCC's regula tion is not entitled to Chevron deference because it pro duces a "major alteration in the federal-state balance of authority." Pet. Br. 43. Far from altering the tradi tional allocation of responsibilities between the federal and state governments, the regulation is consistent with this Court's repeated statements that national banks are created by the government to serve federal purposes and that oversight of the banks is therefore principally entrusted to the United States.
"Nearly two hundred years ago, in McCulloch v. Maryland, [17 U.S. 316,] 4 Wheat. 316 (1819), this Court held federal law supreme over state law with respect to national banking." Watters, 550 U.S. at 10. "National banks are instrumentalities of the Federal government, created for a public purpose, and as such necessarily subject to the paramount authority of the United States." Davis, 161 U.S. at 283. As this Court has re peatedly recognized, "the States can exercise no control over [national banks], nor in any wise affect their opera tion, except in so far as Congress may see proper to per mit." Watters, 550 U.S. at 11 (quoting Farmers' & Mechs'. Nat'l Bank, 91 U.S. at 34). Interpreting Section 484 to preclude state enforcement of laws concerning "activities authorized or permitted pursuant to federal banking law" (12 C.F.R. 7.4000(a)(2)(iii)) therefore sim ply reserves to the federal government its traditional responsibility for the enforcement of laws that regulate the performance by federal instrumentalities of their federally authorized activities.
Petitioner's reliance (Br. 43-45) on Printz v. United States, 521 U.S. 898 (1997), and New York v. United States, 505 U.S. 144 (1992), is misplaced. Those deci sions held that the Tenth Amendment precludes the federal government from "compel[ling] the States to enact or administer a federal regulatory program." Printz, 521 U.S. at 933 (quoting New York, 505 U.S. at 188). Precluding States from enforcing their fair lend ing laws against national banks does not "compel[] state officers to execute federal laws," id. at 905, but reserves enforcement of laws affecting federally authorized activ ities of federally created entities to the federal officials responsible for their supervision.
As this Court reaffirmed in Watters, federal dis placement of state law over national banks poses no Tenth Amendment concerns. "Regulation of national bank operations is a prerogative of Congress under the Commerce and Necessary and Proper Clauses." 550 U.S. at 22 (citing Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 58 (2003)). "The Tenth Amendment, therefore, is not implicated." Ibid.
2. Chevron deference applies even though Section 484 limits the enforcement authority of state officials rather than addressing the conduct of regulated na tional banks
Petitioner (Br. 46-53) makes several related argu ments that Chevron deference does not apply here be cause Section 484 preempts state law. Those arguments lack merit.
a. Petitioner argues (Br. 46-47) that OCC's regula tion is not entitled to Chevron deference because there is a presumption against preemption of state law. That presumption, however, applies only in "field[s] which the States have traditionally occupied." United States v. Locke, 529 U.S. 89, 108 (2000) (citation omitted). The presumption does not apply to the regulation of national banks and other federal instrumentalities, where federal authority has historically been predominant and the States have not played a significant role. See ibid.; Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341, 347-348 (2001).3 Indeed, this Court has recognized that the "grants of both enumerated and incidental 'powers' to national banks" involve a presumption in favor of pre emption, in that those grants are "not normally limited by, but rather ordinarily pre-empt[], contrary state law." Barnett Bank, N.A. v. Nelson, 517 U.S. 25, 32 (1996).
b. In a related vein, petitioner argues (Br. 48-53) that OCC's regulation is not entitled to Chevron defer ence because it "declares the preemptive scope of a fed eral statute." Br. 48. That argument reflects a misun derstanding of Section 484's purpose and effect. Quite apart from Section 484, if particular state laws impose materially greater limitations on the federally autho rized banking activities of national banks than federal law, the NBA preempts those laws under ordinary conflict-preemption principles. As this Court explained in Watters, "when state prescriptions significantly im pair the exercise of authority, enumerated or incidental under the NBA, the State's regulations must give way." 550 U.S. at 12 (citing cases). Section 484 does not speak to the circumstances under which substantive state laws will be preempted, but instead addresses whether and how non-preempted state laws applicable to national banks may be enforced by state officials.
OCC's regulation interpreting the term "visitorial powers" is thus different from the regulation at issue in Watters, the "sole purpose" of which "was to pre-empt state law rather than to implement a statutory com mand." 550 U.S. at 44 (Stevens, J., dissenting). In Watters, the dissenting Justices expressed the view that regulations like the one at issue there, which "purport[] to decide the scope of federal pre-emption," id. at 41, are not entitled to Chevron deference because they im properly attempt "to transform the preemption question from a judicial inquiry into an administrative fait ac compli," id. at 40 n.24 (citation omitted). That concern is not presented by the regulation at issue here, which does not address the preemption question itself, but instead construes the meaning of an ambiguous term in an "express command" in the statute that Congress has charged OCC to administer. Id. at 14.
In Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735 (1996), the Court deferred to OCC's interpretation of the term "interest" in 12 U.S.C. 85, which "authorizes a national bank to charge out-of-state credit-card cus tomers an interest rate allowed by the bank's home State, even when that rate is higher than what is permit ted by the States in which the cardholders reside." 517 U.S. at 737. The Court rejected the plaintiff's argument that "the 'presumption against . . . preemption' * * * trumps Chevron, and requires a court to make its own interpretation of § 85 that will avoid (to the extent possi ble) pre-emption of state law." Id. at 743-744. The Court held that deference was warranted even though the practical effect of OCC's interpretation was to pre clude the application of state laws that would have been applicable if Section 85 had been given a different con struction.
To be sure, whereas the statutory provision at issue in Smiley defined the conduct in which regulated enti ties (the national banks) could lawfully engage, Section 484 is directed not at the banks themselves but at state and federal officials acting in their governmental capaci ties. In that sense Section 484, and OCC's regulation construing "visitorial powers," may bear a family resem blance to a preemption provision. But neither Section 484 nor the challenged regulation purports to "immu nize" national banks from any state laws that would es cape preemption under usual conflict-preemption princi ples. Watters, 550 U.S. at 39 (Stevens, J., dissenting). Thus, even if principles of Chevron deference were uniquely inapplicable to federal regulations that define the preemptive scope of a federal statute, the regulation at issue here does not fall within that category.
c. Even if OCC's "visitorial powers" regulation de fined the scope of federal preemption in the way peti tioner claims, the regulation would be entitled to judicial deference. "Federal regulations have no less pre-emp tive effect than federal statutes." Fidelity Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153 (1982). And courts review preemptive regulations under the same deferential standards applicable to other regula tions, i.e., "only to determine whether [the agency] has exceeded [its] statutory authority or acted arbitrarily." Id. at 154; see City of N.Y. v. FCC, 486 U.S. 57, 64 (1988). "[I]f the agency's choice to pre-empt represents a reasonable accommodation of conflicting policies that were committed to the agency's care by the statute," the Court will "not disturb it unless it appears from the stat ute or its legislative history that the accommodation is not one that Congress would have sanctioned." Ibid. (internal quotation marks and citation omitted); see Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 699-700 (1984); de la Cuesta, 458 U.S. at 154.
Petitioner argues (Br. 49-50) that Chevron deference should not apply to preemptive regulations because pre emption questions do not implicate an agency's exper tise. That is incorrect. Federal agencies "have a unique understanding of the statutes they administer and an attendant ability to make informed determinations about how state requirements may pose 'an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.'" Wyeth v. Levine, No. 06-1249 (Mar. 4, 2009), slip op. 20 (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)); accord Medtronic, Inc. v. Lohr, 518 U.S. 470, 496 (1996); id. at 505-506 (Breyer, J., concurring). As administrator of the NBA and supervisor of national banks, OCC is well positioned to determine whether the exercise of concurrent en forcement authority by state officials will assist OCC in its supervision or instead interfere with its responsibili ties and with the exercise by national banks of their fed erally authorized powers.
Petitioner contends (Br. 50-52) that OCC's regula tion should not receive Chevron deference because OCC has a "self-interest" in expanding its regulatory power, particularly since it is funded by assessments on na tional banks. As petitioner himself recognizes (Br. 50- 51), that argument is difficult to square with this Court's practice of deferring to agency interpretations of the scope of their own jurisdiction. See Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 381-382 (1988) (opinion of Scalia, J.). Petitioner does not and could not plausibly contend that OCC's regulation directly expands its regulatory authority. OCC has un disputed power to enforce New York's fair lending law against national banks; the question in this case is whether state officials may exercise such power as well. The apparent thrust of petitioner's argument (Br. 51) is that, by "mak[ing] a federal charter more attractive to banks," OCC's interpretation of "visitorial powers" will eventually increase the number of national banks, thus potentially increasing the revenues available to OCC and indirectly expanding the de facto reach of its regula tory influence.
Petitioner cites no decision suggesting that such speculation justifies withholding Chevron deference. Moreover, the vast majority of state banking depart ments also obtain their revenues primarily from the in stitutions they supervise and have just as much incen tive to encourage banks to maintain state charters. Conference of State Bank Supervisors, A Profile of State Chartered Banking I40-I48 (20th ed. 2004/2005). Thus, to the extent such financial considerations may influence regulatory actions, that prospect only under scores the danger inherent in allowing state officials to exercise enforcement authority over national banks.
3. OCC had statutory authority to promulgate its regu lation
Petitioner argues (Br. 53-57) that OCC lacked au thority to promulgate its regulation because there is no "specific evidence" that Congress gave OCC "rule making authority to declare the scope of statutory pre emption." Br. 53. That argument is mistaken for several reasons.
First, as discussed above, the regulation does not declare the scope of statutory preemption. Second, courts do not presume that an agency lacks authority to issue regulations determining the scope of preemption in the absence of "specific evidence" that Congress gave the agency that authority. See City of N.Y., 486 U.S. at 64 (A "pre-emptive regulation's force does not depend on express congressional authorization to displace state law.") (citation omitted). In New York v. FERC, 535 U.S. 1 (2002), this Court explained that the "presump tion against pre-emption" does not apply to the question whether an agency "is acting within the scope of its con gressionally delegated authority" in issuing a preemp tive regulation. Id. at 18. Instead, the Court "must in terpret the statute to determine whether Congress has given [the agency] the power to act as it has, and [the Court] do[es] so without any presumption one way or the other." Ibid.
Analyzed under that standard, 12 U.S.C. 93a clearly gives OCC authority to promulgate regulations inter preting Section 484. Section 93a grants the Comptroller broad authority "to prescribe rules and regulations to carry out the responsibilities of the office." As this Court has recognized, the Comptroller's responsibilities include supervising national banks, administering the NBA, and enforcing the federal banking laws. Watters, 550 U.S. at 6; NationsBank, 513 U.S. at 256. Those re sponsibilities encompass interpretation of Section 484, a provision of the NBA that specifically addresses the circumstances under which national banks can be sub ject to supervisory and enforcement activities.
Even if "specific evidence" of OCC's authority to make preemption determinations were required, federal banking laws contain ample evidence of that authority. For example, 12 U.S.C. 43 provides that, "[b]efore issu ing any opinion letter or interpretive rule * * * that concludes that Federal law preempts the application to a national bank of" certain state laws (including fair lending laws), OCC must follow notice and comment procedures, including publication of its preemption de termination in the Federal Register. 12 U.S.C. 43(a). See also 15 U.S.C. 6714 (addressing the appropriate level of deference for certain OCC determinations re garding the preemption of state laws regulating insur ance sales or solicitation). Although Section 43 does not grant preemption authority to OCC (Pet. Br. 55-56), it is an express congressional acknowledgment that pre emption determinations are among OCC's delegated "responsibilities." 12 U.S.C. 93a. And Congress's direc tive that OCC preemption determinations be preceded by notice-and-comment rulemaking strengthens the in ference that such determinations should be accorded Chevron deference. See Mead Corp., 533 U.S. at 230 (explaining that "the overwhelming number of [the Court's] cases applying Chevron deference have re viewed the fruits of notice-and-comment rulemaking or formal adjudication").
4. OCC has not changed its position in any way that pre cludes deference
Petitioner asserts (Br. 36, 57) that OCC's interpreta tion of "visitorial powers" has been inconsistent. Even if petitioner were correct, that would not be a basis for declining to apply Chevron deference. See National Cable & Telecommunications Ass'n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005) (Brand X). But, in any event, OCC regulations have long provided that, unless an exception applies, state officials have no authority to conduct examinations or to inspect or require the pro duction of national bank books or records. 12 C.F.R. 7.4000(a)(1) (2005); ibid. (2000); 12 C.F.R. 7.4000(b) (1997); 12 C.F.R. 7.6025(b) (1984); ibid. (1972). OCC opinion letters and interpretive rulings likewise have consistently stated that Section 484 precludes States from demanding national bank records or taking admin istrative enforcement actions against national banks. See, e.g., 1993 OCC Ltr. LEXIS 35 (July 19, 1993); 1993 OCC Ltr. LEXIS 10 (Feb. 26, 1993); 1993 OCC Ltr. LEXIS 8 (Jan. 15, 1993); 1992 OCC Ltr. LEXIS 1 (Jan. 15, 1992); 1989 OCC Ltr. LEXIS 24 (Mar. 22, 1989); 1983 OCC Ltr. LEXIS 22 (Dec. 21, 1983); 1981 OCC Ltr. LEXIS 55 (Mar. 26, 1981); 1979 OCC Ltr. LEXIS 11 (Aug. 1, 1979); 1979 OCC Ltr. LEXIS 47 (Apr. 2, 1979); Interpretive Ruling No. 6025 (1967); ibid. (1964); ibid. (1963). Although OCC did not take a definitive position on the scope of the "courts of justice" exception until 2004, OCC has never interpreted that exception to per mit States to use the courts to regulate the federally authorized banking activities of national banks. And, in its 2004 rulemaking, OCC clarified that the exception does not give States that authority. 69 Fed. Reg. at 1904.
Petitioner is likewise wrong in asserting (Br. 36) that, until 2004, OCC had interpreted Section 484 to permit state officials to bring lawsuits to enforce state laws against national banks. That assertion is appar ently based on statements OCC made in its pleadings in First Union Nat'l Bank v. Burke, 48 F. Supp. 2d 132 (D. Conn. 1999). See Pet. App. 109a. Burke involved a state administrative enforcement action against a national bank. The district court ruled that Section 484 pre cludes States from taking administrative enforcement actions against national banks but stated, in dictum, that the "courts of justice" exception allows judicial enforce ment actions. Burke, 48 F. Supp. at 145-149. OCC, which was the prevailing party, did not appeal.
In its pleadings in Burke, OCC stated that Section 484 permits States to "obtain a judicial declaration as to the meaning of the applicable law." Reply Br. of Pl. in Intervention OCC in Support of Mot. for Prelim. Inj. at 11, Burke, supra (No. 32). In its district court pleadings in this case, OCC described its statements in Burke as an "acquiescence" in the dictum regarding judicial en forcement, but noted that, in its 2004 rulemaking, it had "comprehensively reevaluated" its interpretation of the "courts of justice" exception and disagreed with the Burke dictum. Mem. of Pl. OCC in Support of Mot. for Prelim. Inj. 25 n.20. In fact, OCC's statements in its Burke pleadings are fully consistent with its current regulation, which interprets "visitorial powers" not to encompass declaratory judgment actions (because they seek only to ascertain the meaning of the law, not to enforce it). 69 Fed. Reg. at 1900. In any event, to the extent that OCC's statements in Burke created any un certainty about the scope of the "courts of justice" ex ception, that simply indicates "that there was good rea son for the Comptroller to promulgate the new regula tion." Smiley, 517 U.S. at 743.
C. OCC's Interpretation Of The Term "Visitorial Powers" Is More Consistent With The Text, Structure, and Pur poses of the NBA Than The Alternative Construction Advanced By Petitioner
1. OCC's interpretation of "visitorial powers" is consis tent with the understanding of that term that pre vailed when the NBA was enacted
In 1864, when Congress enacted the NBA, legal dic tionaries defined the term "visitation" broadly to include "[i]nspection; superintendence; direction"; and "regula tion." 2 Alexander M. Burrill, Law Dictionary and Glossary 598 (1860); accord Henry C. Black, A Dictio nary of Law 1225 (1891). The term was further defined as "[t]he act of examining into the affairs of a corpora tion," without limitation to any particular affairs, such as internal management or charter compliance. 2 John Bouvier, A Law Dictionary 633 (1852). Those defini tions reflect the fact that, when the NBA was enacted, the state's visitorial powers over civil corporations were understood to include a broad supervisory authority, exercised to protect the public and enforce compliance with public laws. Moreover, state officials ordinarily exercised that supervision by initiating judicial enforce ment actions. Id. at 634 ("visitation of civil corporations is by the government itself, through the medium of the courts of justice").
The concept of "visitation" originated in Roman law and canon law, where the term described the exclusive authority exercised by the Church hierarchy over Church institutions. It gradually evolved to include the authority of founders over the charitable organizations they endowed and, later, the King over the civil corpora tions he chartered. Roscoe Pound, Visitatorial Juris diction Over Corporations in Equity, 49 Harv. L. Rev. 369, 369-370 (1936). Thus, in the 1760s, Blackstone de scribed parallel but distinct systems of visitation for ecclesiastical, eleemosynary, and civil corporations. 1 William Blackstone, Commentaries *467-*472.
Ecclesiastical institutions were visited by the ordi nary, who ensured their proper behavior in accordance with canon law. Blackstone *468. Eleemosynary insti tutions were generally subject to the supervision of a "private visitor," ordinarily either the founder or some one he had appointed. Pound 370; Blackstone *469; Trustees of Dartmouth Coll. v. Woodward, 17 U.S. (4 Wheat.) 518, 673-677 (1819) (Story, J., concurring). The private visitor's authority derived from the founder's right "to see that [his] property [was] rightly em ployed." Blackstone *469; see Horace L. Wilgus, Pri vate Corporations § 159, at 225-226 (1911); Joseph K. Angell & Samuel Ames, Treatise on the Law of Private Corporations Aggregate § 687, at 637 (7th ed. 1861). The source of the private visitor's authority, and the nature and object of eleemosynary organizations, dic tated a narrow scope for the private visitor's duties: his task was to ensure that the organization adhered to the rules and pursued the purposes set out in its founding documents. See id. § 684, at 636; Charles B. Elliott, A Treatise on the Law of Private Corporations § 90, at 94 (Howard S. Abbott ed., Bobbs-Merrill 4th rev. ed.) (1893); James Grant, A Practical Treatise of the Law of Corporations in General, As Well Aggregate as Sole 512 (1854); 2 Stuart Kyd, A Treatise on the Law of Corpora tions 276 (1794).
Unlike ecclesiastical and eleemosynary institutions, however, civil corporations were founded by the govern ment for public purposes. Accordingly, they were vis ited by the government itself, and the government's visitorial powers were broader than those of a private visitor. See Elliott § 90, at 94 (stating that the govern ment's visitorial power over civil corporations "is founded more on grounds of public policy than on any theory of succession to the rights of a prehistoric founder. As a general rule the state has the same con trol, in this respect, over corporations that it has over individuals."); Angell & Ames § 684, at 636 ("Civil corpo rations, whether public or private, being created for public use and advantage, properly fall under the super intendency of that sovereign power whose duty it is to take care of the public interest."); 1 Seymour D. Thomp son, Commentaries on the Law of Private Corporations § 475, at 580 (2d ed. 1908) ("In its visitorial capacity the state checks and controls corporate affairs, even for the protection of those who deal with them."). The govern ment traditionally exercised those broad visitorial pow ers over civil corporations "through the medium of the courts of justice." Elliott § 90, at 94. Thus, Blackstone explained that civil corporations were "visited and in spected by the king their founder, in his majesty's court of king's bench, according to the rules of common law." Blackstone *469. There, "all misbehaviours of this kind of corporations [were] enquired into and redressed." Ibid.
In the United States, state governments generally were the charterers and visitors of civil corporations. Thompson § 476, at 581. The States commonly exercised their visitorial powers through court actions by their attorneys general using prerogative writs, such as man damus, or the equitable writ of injunction. Wilgus § 153, at 221; Pound 374-388. Those writs enabled the States to police compliance by corporations with not only their charters and internal regulations but also public laws. "The basis of mandamus to private corporations and their officers [was] the visitorial jurisdiction of the state over all corporations which it has created," and manda mus could be used "to compel domestic corporations or their officers to perform specific duties incumbent on them by reason of their charters, or under statutes or ordinances or imposed by the common law." Id. at 375; S.S. Merrill, Law of Mandamus § 158, at 194 (1892) ("[U]nder the visitorial power of the state, any breach of duty by a private corporation may be corrected by this writ."); ibid. (The duty "may be imposed by its charter, by the general statutes, or by the common law.") (foot notes omitted); accord Wilgus § 156, at 223. Of particu lar relevance here, mandamus was used to compel com mon carriers and certain other corporations to comply with "statutory or common law" obligations "of extend ing to all without discrimination the use of their ser vices." Merrill § 162, at 200. States could also seek in junctions "whenever a corporation [wa]s abusing the power given it for a public purpose, or acting adversely to the public, or creating a nuisance." Id. § 157, at 224- 225; accord 4 Eugene A. Gilmore & William C. Wermuth, Modern American Law § 81, at 101 (1921).
Beginning in the 19th century, States also exercised visitorial powers over corporations through commissions or "public" visitors. Wilgus § 160, at 226; Gilmore & Wermuth § 80, at 100-101. Those commissions "exer cise[d] a general supervision" "for the protection of the public." Ibid.; Wilgus § 160, at 226. That was particu larly true of banking regulation, where the State's "visitorial" authority "extend[ed] to the minutest details of the banking business," to "protect the public by any and all reasonable regulations necessary to that end." Thompson § 460, at 556.
Several state statutes gave banking commissioners broad authority to investigate banks' compliance with any public laws bearing on their banking business and to bring judicial actions to enforce those laws. For ex ample, an 1838 Massachusetts statute authorized state commissioners to "visit" every bank and "examine all [its] affairs" to determine whether it had "complied with the provisions of law applicable to [its] transactions." Act of Feb. 23, 1838, ch. 14, § 2, 1838 Mass. Acts 303. If the commissioners concluded that a bank had "exceeded its powers, or ha[d] failed to comply with all of the rules, restrictions and conditions provided by law," the com missioners were authorized to apply to the state su preme court for an injunction. § 5, 1838 Mass. Acts 304. In addition, when the commissioners concluded that a bank had "violated any law of this Commonwealth," they were required to make a special report to the legisla ture. § 6, 1838 Mass. Acts 305.
New York's banking statutes gave its commissioners similarly broad authority. The commissioners were in structed to "visit" every banking corporation and "thor oughly to inspect [its] affairs." Safety Fund Act, ch. 94, § 15, 1829 N.Y. Laws 170. If they "ascertain[ed] from such inspection, and examination, or in any other man ner, that any of said corporations * * * ha[d] violated any of the provisions of their acts or acts of incorpora tion, or of any other act binding on such corporations," the commissioners were required immediately to seek an injunction against the bank. § 18, 1829 N.Y. Laws 170. See Act of May 14, 1840, ch. 363, § 12, 1840 N.Y. Laws 307-308 (authorizing the commissioners to bring a judicial action against any banking association or indi vidual banker "found to have violated any law of this state * * * in the same manner and with the like effect as any incorporated bank may be proceeded against for a violation of its charter"). The broad visitorial powers exercised by New York's banking commissioners are particularly relevant to the interpretation of the NBA because, as petitioner notes (Br. 21), Congress modeled the NBA on New York's regulatory system. John Jay Knox, A History of Banking in the United States 422 (1903).
Petitioner is therefore wrong in contending (Br. 24- 26) that, when the NBA was enacted, the term "visitorial powers" was understood to be limited to supervision of a corporation's internal management and charter com pliance. In particular, petitioner's reliance (Pet. 25) on treatise discussions addressing the powers of private visitors over eleemosynary corporations is misplaced because, as discussed above, the authority of those pri vate visitors was considerably narrower than the powers of the state and its public visitors over civil corporations, especially banking corporations. Indeed, the very trea tises cited by petitioner indicate that the State could invoke mandamus when corporations "refuse[d] to per form a duty cast upon them by the law of the land." Grant 262; accord Kyd 293-314 (giving examples of where mandamus lies to execute statutes and common law duties).
Far from supporting petitioner's narrow view of the term "visitorial powers," NBA-era sources suggest that the term was often used to describe state officials' en forcement of all state laws that applied to banks, even laws unrelated to the business of banking. In interpret ing Section 484 in its current form, however, OCC did not adopt so broad a reading of the term "visitorial pow ers," but instead construed that term not to encompass enforcement of state laws unrelated to the business of banking. See p. 15, supra. OCC recognized that, in to day's environment, state officials' enforcement against national banks of laws that do not concern banking pow ers is unlikely to undermine the national banking system or interfere with OCC supervision, and that OCC's own expertise lies in supervising banking activities rather than enforcing compliance with state laws aimed at un related conduct.
As the court of appeals explained, OCC thus "reached a permissible accommodation of conflicting policies that were committed to it by the statute," by "shield[ing] national banks 'from unduly burdensome and duplicative state regulation' in the exercise of their federally authorized powers," while "leaving state offi cials free to enforce a wide range of laws that do not purport to regulate a national bank's exercise of its au thorized banking powers." Pet. App. 28a-29a (quoting Watters, 550 U.S. at 11). OCC's decision not to adopt the broadest possible reading of the term "visitorial powers" that NBA-era sources might support was wholly reasonable and is in any event unchallenged in this case. Those sources strongly indicate, however, that petitioner's far narrower interpretation of the stat utory language is not required by the NBA's text or his tory.
2. OCC's interpretation of the term "visitorial powers" is supported by the structure of Section 484
Section 484(a)'s general prohibition against the unau thorized exercise of "any visitorial powers" over national banks is qualified by four exceptions. Those exceptions shed light on the meaning of the term "visitorial pow ers" because they imply that the relevant activities would otherwise be encompassed by the general prohibi tion. See, e.g., First Nat'l Bank in St. Louis v. Mis souri, 263 U.S. 640, 658 (1924) (St. Louis) (provision allowing national banks that convert from state charters to retain preexisting branches confirmed that branch banking was generally prohibited). The exceptions in Section 484 support OCC's view that the term "visitorial powers" is not limited to supervision of internal bank affairs and charter compliance, but also encompasses state efforts to obtain bank records for other purposes.
For example, Section 484(b) provides that, "[n]ot withstanding" Section 484(a)'s general prohibition on the exercise of visitorial powers, "State auditors and examiners may," under specified circumstances, "review [a national bank's] records solely to ensure compliance with applicable State unclaimed property or escheat laws." 12 U.S.C. 484(b). Those laws are not compo nents of a bank's charter and do not regulate its internal affairs; indeed, they are not even specific to banking. Accordingly, Section 484(b) demonstrates that "visi torial powers" are not limited to supervisory oversight over internal management and charter compliance, but also include reviewing bank records to ensure compli ance with public laws. That conclusion is reinforced by Section 484(b)'s use of the word "solely," which indicates that, unless some other exception applies in a particular circumstance, the "visitorial powers" prohibition bars state inspection of national bank records for purposes other than enforcement of unclaimed property and escheat laws.4
The other exceptions in Section 484 also confirm that the term "visitorial powers" encompasses state efforts to obtain bank records for a broad range of purposes, including monitoring compliance with public laws. Sec tion 484(a) includes an exception for visitations "autho rized by Federal law." 12 U.S.C. 484(a). One such visi tation is described in 26 U.S.C. 3305(c), which provides that "[n]othing contained in [Section 484] shall prevent any State from requiring any national" bank to provide payroll records and reports for unemployment tax pur poses. Similarly, 12 U.S.C. 62 permits "the officers au thorized to assess taxes under State authority" to in spect national bank shareholder lists. Both provisions would be unnecessary if the concept of "visitation" were limited to supervisory oversight of internal management and charter compliance.5
Section 484(a) also contains an exception permitting Congress and its committees to exercise visitorial pow ers over national banks. That exception likewise re flects the broad scope of the term "visitorial powers." Congress and its committees do not ordinarily examine banks to ensure charter compliance or supervise corpo rate governance, but congressional committees fre quently request or subpoena business records to aid in the drafting and consideration of new legislative propos als. Indeed, the congressional exception was added pre cisely because Section 484's predecessor would other wise have precluded Congress from demanding bank records for legislative purposes. In the early 1900s, sev eral national banks, relying on the NBA's "visitorial powers" provision, refused to provide records requested by a congressional committee. In response, the commit tee's counsel recommended adoption of the exception. He explained that the exception was necessary because, under the NBA, "[t]he visitorial power over the banks is vested solely in the Comptroller of the Currency, and Congress can not investigate the banks and find out what they are doing as a basis for remedial legislation." Hearings Before the Senate Committee on Banking and Currency, 63d Cong., 1st Sess. 1322 (1913) (statement of Samuel Untermyer).
The final exception, for visitorial powers "vested in the courts of justice," also supports OCC's interpreta tion. Like Congress, the courts do not themselves su pervise banks' internal management or charter compli ance. In cases that are otherwise properly before them, however, courts regularly issue subpoenas or other or ders requiring the production of bank records. The "courts of justice" exception permits those normal judi cial processes in actions that are not otherwise "visi torial" or are "visitorial" but authorized by federal law. 12 C.F.R. 7.4000(b)(2); 68 Fed. Reg. at 6369-6370.
As this Court held in Guthrie v. Harkness., 199 U.S. 148, 159 (1905), because visitation over banks and other civil corporations is a "public right," efforts by private individuals to inspect bank records or to sue banks for redress of injury do not involve the exercise of "visi torial powers." The "courts of justice" exception en sures that private individuals may utilize the judicial process for those purposes, even though, because courts are state actors, judicial orders compelling bank docu ments might otherwise fall under the "visitorial powers" prohibition. See ibid.; 68 Fed. Reg. at 6369. By con trast, the bringing of a lawsuit by the New York Attor ney General is itself the exercise of "visitorial powers," separate and distinct from any exercise of judicial power that the suit is intended to prompt.6
Petitioner contends (Br. 36-39) that the exceptions described above were enacted to resolve disputes about whether the relevant activities were in fact "visitorial." It is far from clear that every exception was the product of such a dispute. But in any event, Congress did not amend the general prohibition to clarify that the term "visitorial powers" has the limited construction peti tioner espouses. Instead, in each case, Congress created an exception to the general prohibition. And even if the exceptions do not conclusively refute petitioner's under standing of the term "visitorial powers," they demon strate that petitioner's proposed definition is hardly unambiguously correct. Because OCC's interpretation of ambiguous NBA provisions is entitled to deference, that is a sufficient basis for rejecting petitioner's chal lenge to OCC's regulation.
3. OCC's interpretation advances the purposes of the NBA, including Section 484
Enacted during the Civil War, the NBA created a national banking system, "extending throughout the country, and independent, so far as powers conferred are concerned, of state legislation which, if permitted to be applicable, might impose limitations and restrictions as various and as numerous as the States." Watters, 550 U.S. at 14 (quoting Easton v. Iowa, 188 U.S. 220, 229 (1903)). Congress viewed the national banking system as critical to the Nation's survival-essential to financ ing the war, establishing a national currency, and pro moting a strong national economy. See, e.g., Cong. Globe, 38th Cong., 1st Sess. 1376 (1864) (Rep. Kasson); id. at 1451 (Rep. Hooper); id. at 1893-1894 (Sen. Sum ner); id. at 1897 (Sen. Sherman); id. at 2128-2130 (Sen. Sumner); id. at 2130 (Sen. Chandler).
The legislative debates that culminated in the NBA's enactment reflected Congress's concern that the States would seek to undermine the new national banks, which were designed to replace existing state-chartered banks. Tiffany, 85 U.S. (18 Wall.) at 412-413; e.g., Cong. Globe 1375 (Rep. Pike); id. at 1376 (Rep. Miller); id. at 1256, 1451 (Rep. Hooper); id. at 1893-1894, 2128-2130 (Sen. Sumner). Accordingly, Congress included in the NBA protections against potential state interference. For example, wary that state usury laws could impair the survival and prosperity of national banks, Congress pro vided a federal formula that constrained state regulation of national bank interest rates and an exclusive federal remedy for usury claims against national banks. See Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 10-11 (2003); 12 U.S.C. 85-86. Similarly, instead of relying on state contract law, Congress provided a federal remedy, administered by the Comptroller, for failures by na tional banks to redeem their circulating notes. NBA §§ 46-48, 13 Stat. 113-114.
The NBA's "visitorial powers" provision was an inte gral part of Congress's effort "[t]o prevent inconsistent or intrusive state regulation from impairing the national system." Watters, 550 U.S. at 11. OCC's interpretation of that provision as encompassing all state efforts to investigate or enforce national bank compliance with laws concerning federally authorized banking powers furthers that purpose. Subjecting a national bank's ex ercise of those powers "to the State's investigative and enforcement machinery would surely interfere with the banks' federally authorized business." Id. at 13. State investigation and enforcement would also interfere with OCC's efforts to provide uniform and coherent supervi sion since "[c]onfusion would necessarily result from control possessed and exercised by two independent au thorities." Id. at 14 (quoting Easton, 188 U.S. at 232). Such "[d]iverse and duplicative superintendence of na tional banks' engagement in the business of banking, [this Court] observed over a century ago, is precisely what the NBA was designed to prevent." Id. at 13-14.
As explained above, one means by which the NBA protects the national banking system against interfer ence from state officials is by preempting the application to national banks of substantive state laws that "signifi cantly impair the exercise" by national banks of powers that are "enumerated or incidental under the NBA." Watters, 550 U.S. at 12. Even when state law is not pre empted, however, because its substantive requirements essentially track those imposed by analogous federal statutes, enforcement of that law by state officials could undermine OCC's supervision of the national banking system if those officials adopted different enforcement priorities or preferred different remedies than their OCC counterparts. See J.A. 120a (Decl. of Grace E. Dailey, Deputy Comptroller for Large Bank Supervi sion); Easton, 188 U.S. at 232 (explaining that state con trol would necessarily result in confusion because "it would have to be exercised and limited by [the State's] own discretion"). For example, state officials might bring enforcement actions for diverse kinds of injunctive relief that take little account of the root causes of the problem or the effect of the required future conduct on the overall operations of the bank. The OCC, by con trast, can invoke a broad range of remedial actions tai lored to assure compensation of injured parties, while maintaining the integrity of the national banking sys tem, not only within the State where the particular com plaint initially arose, but nationwide if warranted.
The potential for inconsistent direction regarding the exercise of core banking powers is particularly acute in the context of fair lending laws. Determining whether a bank has violated such laws requires careful review of the bank's underwriting and pricing decisions and judg ments about whether those decisions were justified or required by safe and sound lending practices. See 59 Fed. Reg. 18,270 (1994); HMDA Data Questions 5-6; p. 4, supra. Thus, even when a state fair lending statute is not preempted because its substantive requirements are not meaningfully different from those imposed by federal law, enforcement of the law by state officials poses a significant threat to national banks' perfor mance of their federal responsibilities and to OCC's ex ercise of its supervisory duties.7
4. This Court's decisions in Guthrie and Watters support OCC's interpretation
a. In Guthrie, this Court held that an action by a private shareholder of a national bank seeking access to the bank's books and records was not prohibited by Re vised Statutes § 5241 (1875), the predecessor to Section 484 then in effect. The Court concluded that the "visitorial powers" prohibition did not encompass the "private right" of the shareholder to inspect the bank's records because "[t]he right of visitation" is a "public right." Guthrie, 199 U.S. at 158-159.
In reaching that conclusion, the Court reviewed vari ous definitions of the term "visitation," some of which primarily discussed supervision of corporate gover nance, but several of which made clear that the term also encompasses other exercises of supervisory and regulatory power. For example, the Court cited approv ingly Bouvier's definition of "visitation" as "[t]he act of examining into the affairs of a corporation." Guthrie, 199 U.S. at 157. The Court also cited a circuit court case stating that "[v]isitation, in law, is the act of a superior or superintending officer, who visits a corporation to examine into its manner of conducting business, and enforce an observance of its laws and regulations" and noting Burrill's broad definition of "visitation" as "in spection; superintendence; direction; regulation." Id. at 158 (quoting First Nat'l Bank v. Hughes, 6 F. 737, 740 (C.C.N.D. Ohio 1881)). And the Court quoted Merrill's statement that "[v]isitors of corporations have power to keep them within the legitimate sphere of their opera tions, and to correct all abuses of authority, and to nul lify all irregular proceedings." Ibid. (quoting Merrill § 175, at 213).
The Court also explained the breadth of the visitorial exclusivity intended by Congress, explaining that "Con gress had in mind in passing [Section 5421] that in other sections of the law it had made full and complete provi sion for investigation" of national banks by the Comp troller and his examiners, as well as for remedial action against the bank. Guthrie, 199 U.S. at 159. The Court observed that "[i]t was the intention that this statute should contain a full code of provisions upon the subject, and that no state law or enactment should undertake to exercise the right of visitation over a national corpora tion." Ibid.
Guthrie thus supports OCC's interpretation of the term "visitorial powers," making clear that, for civil cor porations, the term denotes governmental (as opposed to private) enforcement actions. Petitioner's assertion (Br. 27) that the plaintiff's status as a private individual asserting a private right "was not critical to the deci sion" in Guthrie cannot be squared with the Court's statement of the reasons for its holding. See Guthrie, 199 U.S. at 158-159. Contrary to petitioner's contention (Br. 26-27), the Court did not rely on a distinction be tween "supervisory oversight regimes" and "enforce ment of other valid legal obligations of the bank." In deed, that distinction is inconsistent with the Court's broad description of the reasons for, and the scope of, the "visitorial powers" prohibition.
b. Watters also supports OCC's interpretation. The Court in Watters held that a national bank's mortgage lending business, "whether conducted by the bank itself or through the bank's operating subsidiary, is subject to OCC's superintendence, and not to the licensing, report ing, and visitorial regimes of the several States in which the subsidiary operates." 550 U.S. at 7. Although the decision turned primarily on implied conflict preemp tion, the Court's analysis indicates that the term "visitorial powers" encompasses petitioner's investiga tion and threatened enforcement efforts against national banks.
Watters involved Michigan laws regulating mortgage brokers, lenders, and servicers. 550 U.S. at 8. The laws imposed various registration, supervisory, and reporting requirements, and they provided for enforcement of those requirements through judicial actions by the state commissioner of insurance and financial services or the state attorney general. Id. at 9-10 (citing, inter alia, Mich. Comp. Laws Ann. § 445.1661 (West 2002); id. § 493.56b (West Supp. 2005)). The laws also gave the commissioner investigative authority, including adminis trative subpoena authority. Mich. Comp. Laws Ann. § 445.1661 (West 2002); id. § 493.56b (West Supp. 2005). The State conceded that those provisions could not properly be applied to national banks themselves, but it argued that its regulatory regime could be enforced "with respect to national banks' operating subsidiaries." Watters, 550 U.S. at 15.
This Court made clear, consistent with the State's concession, that application of the pertinent Michigan laws to national banks would constitute an exercise of "visitorial powers" prohibited by Section 484. 550 U.S. at 13-15. The Court relied on both Guthrie and OCC's regulation, specifically citing OCC's definition of "visitorial powers" as including both "[i]nspection of a bank's books and records" and "[e]nforcing compliance with any applicable federal or state laws concerning" federally authorized banking activities. Id. at 14 (citing 12 C.F.R. 7.4000(a)(2)). The Court concluded that Mich igan could not "confer on its commissioner examination and enforcement authority over mortgage lending, or any other banking business done by national banks." Id. at 14-15. Given the significant similarities between the powers authorized by the Michigan laws and the powers asserted by petitioner, Watters strongly supports OCC's regulation and the court of appeals' judgment upholding the injunction.8
5. OCC's interpretation is supported by other provisions of federal banking law
OCC's interpretation of "visitorial powers" is also consistent with the approach Congress has taken when explicitly addressing enforcement of state fair lending laws against national banks. In the Riegle-Neal Inter state Banking and Branching Efficiency Act of 1994 (Riegle-Neal), Pub. L. No. 103-328, 108 Stat. 2338, Con gress authorized national banks to operate interstate bank branches. Riegle-Neal also explicitly addressed the application of state fair lending laws to those inter state branches. Congress provided that such state laws ordinarily apply to the interstate branches of national banks unless federal law preempts their application to national banks in general. 12 U.S.C. 36(f)(1)(A). Con gress further directed, consistent with OCC's interpre tation of Section 484, that "[t]he provisions of any State law to which a branch of a national bank is subject under this paragraph shall be enforced, with respect to such branch, by the [OCC]." 12 U.S.C. 36(f)(1)(B).
Contrary to petitioner's contention (Br. 34-36), OCC's enforcement authority under Section 36(f)(1)(B) is clearly exclusive. Section 36(f)(1)(A) provides that specified state laws generally apply to interstate branches of national banks unless the laws are pre empted, and Section 36(f)(1)(B) provides that such state laws "shall be enforced" by OCC. Taken together, the use of the passive voice and the word "shall" make clear that Congress intended for the non-preempted state laws to be enforced by OCC and OCC alone. Indeed, Congress has used the same phrasing in other financial services laws to confer exclusive enforcement authority. See 15 U.S.C. 6711 (providing that "insurance activities of any person," including national banks, "shall be func tionally regulated by the States" subject to certain limi tations).
As petitioner notes (Br. 34-36), Riegle-Neal's text, see 12 U.S.C. 36(f)(3), and legislative history indicate that Congress intended its provisions to reflect, rather than to alter, the existing balance between federal and state authority. Riegle-Neal also refutes petitioner's suggestion (Br. 43) that the purportedly "aberrant" na ture of the enforcement regime that OCC's regulation contemplates, under which non-preempted state fair lending laws will be enforceable against national banks solely by OCC rather than by state officials, provides a basis for declaring the regulation invalid. Though such a regime is unusual, Riegle-Neal unambiguously man dates that enforcement scheme with respect to the inter state branches of national banks. There is no reason to suppose that Congress gave state officials greater en forcement authority over national banks themselves than over their interstate branches. Accordingly, Con gress's decision to vest OCC with exclusive authority to enforce state fair lending laws that apply to the inter state branches of national banks strongly supports OCC's interpretation of Section 484.
D. Petitioner's Arguments That OCC's Interpretation Is Unreasonable Are Not Persuasive
1. a. In arguing that OCC's interpretation of "visi torial powers" is unreasonable, petitioner primarily con tends (Br. 21-32) that the term is unambiguously limited to "supervisory oversight" of a "bank's safety and soundness, internal organization, or charter compli ance," Br. 26. As explained above, that contention can not be squared with the text, structure, and purposes of the NBA, or with this Court's decisions in Guthrie or Watters. And while petitioner posits a dichotomy be tween "supervisory oversight" and "[e]nforcement of [g]enerally [a]pplicable [l]aw," Br. 21, the New York fair lending law at issue here does not fall within either cate gory. Although the law serves purposes other than en suring the safety and soundness of regulated banks, it applies only to those "who extend credit" (Pet. Br. 24 n.7), and its enforcement provisions reflect its focus on the banking business. One of the primary enforcement mechanisms is by complaint to the New York banking superintendent, who then resolves the complaint through an administrative process. N.Y. Exec. Law § 296-a(6)-(10) (McKinney 2005). Moreover, the banking superintendent is "empowered to promulgate rules and regulations" to effectuate the law. Id. § 296-a(11).
Unlike (for example) a general prohibition on racial discrimination in employment, the New York law regu lates core banking powers granted by a national bank's charter-the powers to engage in residential and other lending. 12 U.S.C. 24(Seventh), 371(a). Enforcement will necessarily require the State to engage in "supervi sory oversight" of the bank's exercise of those powers and to make decisions that affect its safety and sound ness. As described above, it is impossible to determine whether a bank has engaged in unlawful lending dis crimination without making judgments about whether the bank appropriately exercised its lending powers, including whether its actions were driven by safe and sound lending practices. See p. 42, supra.9
b. Petitioner asserts (Br. 21-24) that his interpreta tion of "visitorial powers" is supported by Congress's original placement of the visitorial exclusivity provision in Section 54 of the NBA, which primarily addressed the Comptroller's examination authority. Even if the scope of "visitorial powers" were coextensive with the scope of the Comptroller's examination authority, that would not mean that "visitorial powers" are limited to supervision of a bank's safety and soundness, internal organization and charter compliance, because Section 54 in its origi nal form authorized the Comptroller to "make a thor ough examination into all the affairs" of the bank. NBA § 54, 13 Stat. 116 (emphasis added). In any event, Con gress's initial placement of the visitorial powers provi sion in Section 54 does not suggest that "visitorial pow ers" and "examination" are synonymous. On the con trary, Congress's use of distinct terms suggests that they have different meanings.
2. Petitioner also contends (Pet. 27-32) that OCC's interpretation of Section 484 is foreclosed by certain decisions of this Court. Contrary to that contention, none of those decisions mentions, much less construes, Section 484, its predecessor provisions, or the term "visitorial powers." Nor did the Court have the opportu nity to consider the regulation at issue in this case, which was not promulgated until long after those deci sions were issued.10
In any event, none of the decisions indicates that petitioner has authority to enforce state fair lending laws against national banks or to demand national bank records in aid of that enforcement effort. Petitioner principally relies (Br. 28-30) on St. Louis, which in volved Missouri's suit against a national bank to enforce a state statute prohibiting banks from operating branches. The Court first determined that federal law at the time did not authorize national banks to engage in branch banking (except in one circumstance inapplicable to the bank at issue). 263 U.S. at 655-659. The Court then held that, because "the power sought to be exer cised by the bank finds no justification in any law or authority of the United States, the way is open for the enforcement of the state statute." Id. at 660.
OCC's current interpretation of the term "visitorial powers" is wholly consistent with the Court's analysis in St. Louis because the Missouri law at issue there con cerned an activity (branch banking) that was not autho rized for national banks at that time. The State's suit therefore did not seek to "[e]nforc[e] compliance" with a law concerning "activities authorized or permit ted pursuant to federal banking law." 12 C.F.R. 7.4000(a)(2). Here, in contrast, New York's fair lending law concerns activities-real estate and other lending- that are unquestionably among the authorized activities of national banks under federal banking law.
The other cases cited by petitioner are similarly inapposite. National Bank v. Kentucky, 76 U.S. (9 Wall.) 353 (1870), and Waite v. Dowley, 94 U.S. 527 (1877), involved state laws effectuating collection of state taxes on national bank shareholders. Because the NBA expressly authorized those taxes, the Court con cluded that the States had implicit authority to take rea sonable measures to collect them. See id. at 533-534; National Bank, 76 U.S. (9 Wall.) at 363. Here, by con trast, no provision of the NBA authorizes New York to enact or to enforce fair lending laws against national banks.
Petitioner's reliance on First National Bank of Bay City v. Fellows, 244 U.S. 416 (1917), and First National Bank in Plant City v. Dickinson, 396 U.S. 122 (1969), is likewise misplaced. Fellows involved a state lawsuit challenging as unconstitutional a federal law giving trust powers to national banks. The bank did not invoke the "visitorial powers" prohibition but instead argued that the suit could not proceed "in a state court" because the powers of national banks are "susceptible only of being directly tested in a federal court." 244 U.S. at 427. In rejecting that contention, the Court reasoned that "the particular functions in question [trust powers] by the express terms of the act of Congress were given only 'when not in contravention of State or local law.'" Id. at 428; see 12 U.S.C. 92a(a). The Court therefore concluded that "the state court was, if not expressly, at least impliedly authorized by Congress to consider and pass upon the question whether the particular power was or was not in contravention of the state law." Ibid. That reasoning has no relevance here because a national bank's lending powers are not conditioned on state au thorization. Dickinson is even further afield. It in volved a suit by a bank, not by a State, and the only is sue addressed by this Court was whether the bank's activity constituted "branch[ing]" under 12 U.S.C. 36 (1970), which at that time authorized national banks to engage in branch banking only to the extent permitted by state law.
Anderson National Bank v. Luckett, 321 U.S. 233 (1944) (Anderson), also does not support petitioner. That case concerned the validity of a Kentucky statute requiring banks to turn over to the State deposits that had remained inactive or unclaimed for specified peri ods. The bank did not argue, and the Court did not ad dress, any claim that enforcement of the statute would violate the "visitorial powers" provision. Instead, the Court considered and rejected the bank's arguments that the state law was preempted by the NBA and that it "unconstitutionally interfere[d]" with the bank as an "instrumentalit[y] of the Federal Government." Id. at 239-240. This Court's determination that a national bank could be subjected to the substantive obligations imposed by the challenged state law, see id. at 247-252, is consistent with OCC's current recognition that, al though Section 484 precludes state officials from under taking the enforcement actions that are at issue in this case, it does not preempt the application to national banks of state fair lending laws.
The Anderson Court's further statement that Ken tucky could "enforce" its statute, and, as an incident thereto, could require national "banks to file reports of inactive accounts," 321 U.S. at 252-253, appears incon sistent with the terms of the visitorial powers provision as it existed at that time. But Congress has since amended the provision to add an exception permitting enforcement of state escheat and unclaimed property laws. 12 U.S.C. 484(b); see pp. 35-36, supra. The result in Anderson is therefore consistent with OCC's inter pretation of current Section 484.
3. Petitioner also argues that OCC's interpretation of "visitorial powers" cannot be correct because it would mean that "no governmental authority had the power to enforce valid state law against national banks" between 1864, when the NBA was enacted, and 1966, when Con gress gave OCC authority to issue cease-and-desist or ders to enforce state laws. Pet. Br. 32. That argument ignores the fact that, since the NBA was first enacted, OCC has been authorized to investigate whether na tional banks were complying with applicable state laws. See NBA § 54, 13 Stat. 116. Although OCC did not al ways have formal authority to compel banks to comply with those laws, OCC could use its informal supervisory authority to achieve compliance. Indeed, OCC fre quently uses informal supervisory leverage to obtain compliance with applicable laws and sound banking practices. See United States v. Philadelphia Nat'l Bank, 374 U.S. 321, 330 (1963). And, beginning in 1933, OCC had authority to take formal action against direc tors and officers of national banks for violations of "any law relating to such bank." Banking Act of 1933, ch. 89, § 30, 48 Stat. 193. Moreover, as noted above, Section 484 does not preclude private suits to enforce applicable laws. Accordingly, individuals injured by a national bank's violation of non-preempted state laws have al ways been able to seek redress in the courts.
4. Petitioner further contends (Br. 35-36) that OCC's regulation is unreasonable because OCC lacks the ca pacity or the inclination to enforce state fair lending laws against national banks. That is incorrect.
OCC has general enforcement authority to compel national banks to comply with all laws, both state and federal. 12 U.S.C. 1818(b); National State Bank v. Long, 630 F.2d 981, 988 (3d Cir. 1980). In addition, OCC has specific authority to enforce compliance by national banks with various federal consumer protection laws, including the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691 et seq., which prohibits the same misconduct that petitioner alleged as the basis for his investigation and threatened enforcement actions in this case. Com pare 15 U.S.C. 1691 with N.Y. Exec. Law § 296-a(1) (McKinney 2005).
OCC employs nearly 2000 bank examiners. New examiners are trained to examine for both safety and soundness and consumer compliance, and OCC has many examiner specialists who have professional certifi cations and extensive expertise in compliance, including fair lending. The largest national banks are examined continuously, including for fair lending issues, by on-site examination teams, and other banks receive regular periodic examinations. Hearings Before the House Committee on Financial Services, 110th Cong., 1st Sess. 12-14 (2007) (testimony of John C. Dugan, Comp troller of the Currency); Rooting Out Discrimination in Mortgage Lending: Using HMDA as a Tool for Fair Lending Enforcement: Hearing Before the Subcomm. on Oversight and Investigations of the House Comm. on Financial Services, 110th Cong., 1st Sess. 87 (2007) (statement of Calvin R. Hagins, Director for Compliance Policy, OCC) (Hagins Testimony). When OCC identifies state-law requirements applicable to national banks, examiners are advised of those requirements and can take them into account in conducting examinations. GAO, Publ'n No. 06-387, OCC Preemption Rules: OCC Should Further Clarify the Applicability of State Con sumer Protection Laws to National Banks 23 (2006).
Between 2002 and July 2007, OCC examiners di rected bank management to address approximately 200 issues relating to fair lending and mortgage data report ing. Hagins Testimony 110. In addition, OCC has fre quently referred possible fair lending violations to the Departments of Justice and of Housing and Urban De velopment, and several such referrals have resulted in public enforcement actions. Id. at 106-108. OCC's Cus tomer Assistance Group, which handles all consumer complaints against national banks in coordination with OCC's examination staff, has also facilitated the recov ery by injured customers of tens of millions of dollars. OCC, Report of the Ombudsman 2005-2006, at 10 (Nov. 2007). OCC thus vigorously enforces fair lending laws against national banks.11
CONCLUSION
The judgment of the court of appeals should be af firmed.
Respectfully submitted.
ELENA KAGAN
Solicitor General
MALCOLM L. STEWART
Deputy Solicitor General
MATTHEW D. ROBERTS
Assistant to the Solicitor
General
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
JULIE L. WILLIAMS
First Senior Deputy
Comptroller and Chief
Counsel
DANIEL P. STIPANO
Deputy Chief Counsel
HORACE G. SNEED
DOUGLAS B. JORDAN
Attorneys
Office of the Comptroller of
the Currency
MARCH 2009
1 The NBA's original visitorial exclusivity provision stated that national banks "shall not be subject to any other visitorial powers than such as are authorized by this act, except such as are vested in the several courts of law and chancery." NBA, ch. 106, § 54, 13 Stat. 116. The current version of Section 484 largely tracks that provision but includes additional exceptions to the rule of visitorial exclusivity.
2 Although OCC's regulation defines "visitorial powers" to encom pass a state officer's demand to examine a national bank or inspect its records even if the purpose of that demand is unrelated to the business of banking, this case does not present any question concerning the application of Section 484 and the regulation to a demand of that character. The avowed purpose of petitioner's "letters of inquiry" was to obtain information concerning national banks' federally authorized lending activities. Pet. App. 3a-4a.
3 This Court's decisions in Altria Group, Inc. v. Good, 129 S. Ct. 538 (2008), and Wyeth v. Levine, No. 06-1249 (Mar. 4, 2009), slip op. 9 n.3, did not alter that established principle. They simply make clear that a history of federal regulation does not render the presumption against preemption inapplicable in fields where state regulation has also historically played a substantial role. Unlike the regulated entities in Altria and Wyeth, national banks are not simply the subject of longstanding federal regulation. Rather, they are created by Congress to serve distinctly federal purposes, and their banking powers have never been the subject of extensive state regulation.
4 As explained above (see p. 15 & n.2, supra), although OCC's reg ulation precludes state-initiated enforcement actions only when those actions seek to enforce laws related to the business of banking, the regulation defines the term "visitorial powers" to encompass all gov ernmental demands for national bank records. The statutory excep tions described in the text, which authorize state officials to demand records relevant to the enforcement of escheat and tax laws that are unrelated to the business of banking support the reasonableness of OCC's approach.
5 Other provisions of federal law, such the FH Act, also expressly authorize certain types of visitation by federal and state agencies other than OCC. See 42 U.S.C. 3614 (Department of Justice); 42 U.S.C. 3610 (Department of Housing and Urban Development (HUD)); 42 U.S.C. 3610(f) (state and local agencies certified and monitored by HUD).
6 In the courts below, petitioner argued that his own initiation of a judicial enforcement action would be authorized by the "courts of jus tice" exception even if state administrative enforcement would con stitute a prohibited exercise of "visitorial powers." See Pet. App. 22a, 108a. Petitioner has apparently abandoned that argument in this Court (but see Br. 37 n.16), although some amici (e.g., States Br. 21-22) continue to press it. As both courts below correctly concluded, OCC reasonably refused to interpret the "courts of justice" exception as authorizing state officials to initiate lawsuits to enforce laws that they could not enforce administratively. Such an interpretation is not supported by the exception's text, which refers to powers "vested in," not "exercised through," the courts of justice. Nor would it be con sistent with the overall thrust of Section 484, because it "would swallow the rule" against unauthorized exercises of visitorial authority. Pet. App. 30a. When the NBA was enacted, lawsuits were the primary means by which state officials exercised visitorial powers. Guthrie, 199 U.S. at 157; pp. 28-29, supra. Section 484's general prohibition would therefore have been virtually meaningless if the "courts of justice" exception permitted all visitations accomplished through lawsuits.
7 Petitioner also argues (Br. 40) that state enforcement of applicable state laws poses no greater risk of interfering with bank powers or OCC supervision than private suits to enforce the same laws, which Section 484 does not preclude. That is incorrect. Private suits do not pose a danger comparable to the purposeful state efforts to undermine the national banking system that motivated Section 484's enactment. In addition, allowing private suits under non-preempted state laws furthers the strong countervailing interest in permitting individuals to obtain redress for injuries they have suffered. And, to the extent that private enforcement actions actually prevent or significantly interfere with a bank's exercise of its federal powers or with OCC's supervision, those suits would be barred under conflict-preemption principles. See Watters, 550 U.S. at 12.
8 The dissenting Justices in Watters likewise described as "visitorial" the laws giving investigative, subpoena, and enforcement authority to the commissioner and authorizing judicial enforcement by the state attorney general. 550 U.S. at 34 (citing Mich. Comp. Laws Ann. § 445.1661 (West 2002); id. § 493.56b (West Supp. 2005)). Those Justices would have held, however, that application of the challenged state laws to national-bank operating subsidiaries was neither barred by Section 484 nor otherwise preempted because Section 484 applies only to the exercise of visitorial power over national banks themselves. See id. at 34-35.
9 Moreover, compliance with fair lending laws is an essential component of safe and sound operation. Letter from John C. Dugan, Comptroller of the Currency, to Rep. Barney Frank (Nov. 21, 2005). Failure to comply with fair lending or other consumer protection requirements exposes the bank to the risk of litigation, monetary judgments, and reputational harm, all of which would adversely affect its safety and soundness. See OCC Advisory Ltr. 2002-3 (Mar. 22, 2002).
10 In Brand X, 545 U.S. at 982, this Court held that, under Chevron, an agency may adopt a statutory interpretation that differs from the interpretation previously reached by a federal court so long as the prior judicial construction was not based on the "unambiguous terms of the statute." None of the decisions cited by petitioner could have been based on the "unambiguous terms" of Section 484, because none even mentions that statute. Thus, even if any of the decisions could be construed as adopting, sub silentio, an interpretation of Section 484 that is inconsistent with OCC's regulation, the regulation's superseding interpretation of the term "visitorial powers" would still be controlling if it is reasonable.
11 Some of petitioner's amici suggest (e.g., States Br. 8-14) that OCC's
interpretation of Section 484 somehow contributed to the recent problems
associated with subprime lending. On the contrary, the vast bulk of subprime
loans were originated by state-regulated, non-bank mortgage lenders and
brokers, who were subject to significantly less rigorous oversight and examination
than banks. Loans by those non- depository institutions accounted for a
disproportionate percentage of defaults and foreclosures, as well as the
bulk of abusive and predatory lending. H.R. Rep. No. 441, 110th Cong., 1st
Sess. 36 (2007); Hearings Before the House Comm. on Financial Services,
111th Cong., 1st Sess. (2009) (statement of John C. Dugan, Comptroller of
the Currency).
APPENDIX
1. Section 484 of Title 12, United States Code, provides: Limitation on visitorial powers (a) No national bank shall be subject to any visitor ial powers except as authorized by Federal law, vested in the courts of justice or such as shall be, or have been exercised or directed by Congress or by either House thereof or by any committee of Congress or of either House duly authorized. (b) Notwithstanding subsection (a) of this section, lawfully authorized State auditors and examiners may, at reasonable times and upon reasonable notice to a bank, review its records solely to ensure compliance with applicable State unclaimed property or escheat laws upon reasonable cause to believe that the bank has failed to comply with such laws. 2. Section 93a of Title 12, United States Code, provides: Authority to prescribe rules and regulations Except to the extent that authority to issue such rules and regulations has been expressly and exclusively granted to another regulatory agency, the Comptroller of the Currency is authorized to prescribe rules and reg ulations to carry out the responsibilities of the office, except that the authority conferred by this section does not apply to section 36 of this title or to securities activi ties of National Banks under the Act commonly known as the "Glass-Steagall Act". 3. Section 7.4000 of Title 12 Code, of Federal Regula tions provides, in relevant part: Visitorial powers. (a) General rule. (1) Only the OCC or an autho rized representative of the OCC may exercise visitorial powers with respect to national banks, except as pro vided in paragraph (b) of this section. State officials may not exercise visitorial powers with respect to na tional banks, such as conducting examinations, inspect ing or requiring the production of books or records of national banks, or prosecuting enforcement actions, ex cept in limited circumstances authorized by federal law. However, production of a bank's records (other than non-public OCC information under 12 CFR part 4, subpart C) may be required under normal judicial proce dures. (2) For purposes of this section, visitorial powers in clude: (i) Examination of a bank; (ii) Inspection of a bank's books and records; (iii) Regulation and supervision of activities autho rized or permitted pursuant to federal banking law; and (iv) Enforcing compliance with any applicable fed eral or state laws concerning those activities. (3) Unless otherwise provided by Federal law, the OCC has exclusive visitorial authority with respect to the content and conduct of activities authorized for na tional banks under Federal law. (b) Exceptions to the general rule. Under 12 U.S.C. 484, the OCC's exclusive visitorial powers are subject to the following exceptions: (1) Exceptions authorized by Federal law. National banks are subject to such visitorial powers as are pro vided by Federal law. Examples of laws vesting visitor ial power in other governmental entities include laws au thorizing state or other Federal officials to: (i) Inspect the list of shareholders, provided that the official is authorized to assess taxes under state au thority (12 U.S.C. 62; this section also authorizes inspec tion of the shareholder list by shareholders and credi tors of a national bank); (ii) Review, at reasonable times and upon reason able notice to a bank, the bank's records solely to ensure compliance with applicable state unclaimed property or escheat laws upon reasonable cause to believe that the bank has failed to comply with those laws (12 U.S.C. 484(b)); (iii) Verify payroll records for unemployment com pensation purposes (26 U.S.C. 3305(c)); (iv) Ascertain the correctness of Federal tax returns (26 U.S.C. 7602); (v) Enforce the Fair Labor Standards Act (29 U.S.C. 211); and (vi) Functionally regulate certain activities, as pro vided under the Gramm-Leach-Bliley Act, Pub.L. 106-102, 113 Stat. 1338 (Nov. 12, 1999). (2) Exception for courts of justice. National banks are subject to such visitorial powers as are vested in the courts of justice. This exception pertains to the powers inherent in the judiciary and does not grant state or other governmental authorities any right to inspect, su perintend, direct, regulate or compel compliance by a national bank with respect to any law, regarding the content or conduct of activities authorized for national banks under Federal law. (3) Exception for Congress. National banks are sub ject to such visitorial powers as shall be, or have been, exercised or directed by Congress or by either House thereof or by any committee of Congress or of either House duly authorized. * * * * *