The bankers group sued New York and its city council in Manhattan federal court today, seeking a determination that Local Law 38 of 2012, the Responsible Banking Act, is preempted by federal and state banking law.
“By empowering the city as a bank regulator, and thereby adding a new level of bank regulation in the nation’s financial capital, Local Law 38 impermissibly conflicts with, and is preempted by, federal and New York State law exclusively regulating the activities of federal and state-chartered banks,” the Bankers Association said in its complaint.
The law was passed in June 2012, over the veto of Mayor Michael Bloomberg. It established a Community Investment Advisory Board, under the city’s Department of Finance, instructing it to evaluate how well banks that take deposits from city agencies are helping meet the credit, financial and banking needs of people in the city, particularly low- and middle-income residents.
Kate O’Brien Ahlers, a spokeswoman for the office of New York’s corporation counsel, said the city is reviewing the complaint.
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
The case is New York Bankers Association Inc. v. The City of New York, 13-cv-07212, U.S. District Court, Southern District of New York (Manhattan).
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