Magazine article American Banker

Banks May Benefit from Ludwig's Winning Streak

Magazine article American Banker

Banks May Benefit from Ludwig's Winning Streak

Article excerpt

Comptroller of the Currency Eugene A. Ludwig is under fire in Congress, but his power to expand the national bank charter has been unanimously, and repeatedly, supported by the Supreme Court.

Lawyers and industry officials said the comptroller's string of legal victories - capped by Monday's high court decision on credit card fees should help bankers fight off legislative attempts to limit the agency's authority. In addition, this success in the courts may embolden the Office of the Comptroller of the Currency to bestow even greater powers on national banks.

In four cases over the last two years, the Supreme Court has deferred to the OCC interpretation of the National Bank Act, saying Congress intended for the agency to settle all ambiguities in the statute.

"This should put to rest any notion that the OCC proceeds through legal loopholes," Mr. Ludwig said Wednesday in an interview. "They are reaffirming that we were acting within our authority."

Though thrilled with his agency's vindication, Mr. Ludwig was careful not to flaunt his adversaries and refused to say what plans he has for the national bank charter.

The OCC's streak began in June 1994. The Supreme Court said the agency correctly ruled that Congress did not inadvertently repeal part of the National Bank Act. Next came the so-called Valic case, in which the justices upheld the OCC's determination that banks can sell annuities.

The Supreme Court ruled in February that the OCC was correct when it said national banks could ignore restrictions on bank insurance sales in small towns. Monday's decision affirmed the comptroller's determination that late fees are considered interest.

This track record is expected to strengthen the industry's resolve to fight Rep. Jim Leach's Glass-Steagall reform bill, which is scheduled for a vote today. …

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