A WSJ editorial discusses yesterday's preemption surprise at the Supreme Court, in which Justice Scalia crossed over to join the liberal wing in holding that the National Bank Act and its enforcing regulations do not, after all, oust the states from regulating lending by federally chartered banks:
Justice Scalia's opinion distinguishes between "visitorial" and "prosecutorial" power over national banks. By visitorial he means the power to demand whatever information may be necessary to regulate an institution. Mr. Scalia argues that while the federal Office of the Comptroller of the Currency (OCC) has sole visitorial power over federal banks, state AGs may nonetheless "prosecute" those banks for violations of state law.
There's nothing wrong with this argument as it pertains to, say, state employment law, fraud or other laws of general applicability. But as Justice Clarence Thomas points out in his dissent, lending, including mortgage lending, is a core banking activity authorized by the 1864 National Bank Act and already regulated by the OCC. It is exactly the kind of banking that national banks are supposed to have the freedom to do under a law designed to create a uniform regulatory environment across the entire country.