Bankers Block NYC Law on Service to Lower-Income ResidentsPatrick G. Lee
The New York Bankers Association defeated a New York City law that required some banks to report on how they serve lower-income residents.
The Responsible Banking Act, passed in June 2012 over then-Mayor Michael Bloomberg’s veto, would have required banks that take deposits from city agencies to begin reporting by Tuesday on how they meet the credit, financial and banking needs of low-and middle-income New Yorkers.
U.S District Judge Katherine Failla in Manhattan ruled Aug. 7 that bank regulation is pre-empted by federal and state statues, making the law unconstitutional.
The judge rejected the city’s request to preserve parts of the law, instead ruling it “void in its entirety.”
The bankers association consists of more than 150 banks operating in New York. The group argued that the law would have required them to turn over proprietary confidential information and trade secrets, and that the city doesn’t have the power to regulate banks.
“Banks are not like Uber,” Robert Giuffra Jr., a lawyer for the bankers’ group, told Failla on August 5.
The bankers association is “gratified” that Failla affirmed its position, Michael Smith, president and CEO of the group, said in an e-mailed statement.
“The banks in New York will continue to be supervised by state and federal regulators, and will continue to reinvest in the communities in which they operate,” he said.
The city is “disappointed in the decision” and is considering its options, Nick Paolucci, a Law Department spokesman, said in an e-mail.
Bloomberg, the former mayor, is the founder and majority owner of Bloomberg News’ parent Bloomberg LP.
The case is New York Bankers Association Inc. v. The City of New York et al., 15-cv-04001, U.S. District Court, Southern District of New York (Manhattan).
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.