Exorcising mcculloch: The conflict-ridden history of american banking nationalism and dodd-frank preemption

University of Pennsylvania Law Review

Volumn 161, Issue 5, 2013, Pages 1235-1308

  Hills, Roderick M ^a  

^a NEW YORK UNIVERSITY   (United States)

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[No Author keywords available]

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EID: 84876896182     PISSN: 00419907     EISSN: 19428537     Source Type: Journal    
DOI: None     Document Type: Article

References (174)

1. Jamelle C. Sharpe, Legislating Preemption, 53 WM. & MARY L. REV. 163, 172 (2011).
2. Dodd-Frank Act Implementation, 76 Fed. Reg. 43,549, 43,554 (July 21, 2011).
3. With Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)
4. Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-44 (1984)
5. Dodd-Frank Act Implementation, 76 Fed. Reg. at 43,565-66
6. Letter from George W. Madison, General Counsel, Dep't of the Treasury, to John Walsh, Acting Comptroller of the Currency, office of the Comptroller of the Currency 2 (June 27, 2011), available at http://cdn.Americanbanker.com/ media/pdfs/TreasuryOCC-062811.pdf.
7. office of Thrift Supervision Integration; Dodd-Frank Act Implementation, 76 Fed. Reg. 43,549, 43,554 (July 21, 2011).
8. Bank Activities and Operations; Real Estate Lending and Appraisals, 69 Fed. Reg. 1904, 1907 (Jan. 13, 2004).
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10. Janet A. Riesman, Money, Credit, and Federalist Political Economy, in BEYOND CONFEDERATION
11. DEBATES AND PROCEEDINGS OF THE GENERAL ASSEMBLY OF PENNSYLVANIA: ON THE MEMORIALS PRAYING A REPEAL OR SUSPENSION OF THE LAW ANNULLING THE CHARTER OF THE BANK (Mathew Carey ed., Philadelphia, Seddon & Pritchard 1786).
12. see JACKSON TURNER MAIN, POLITICAL PARTIES BEFORE THE CONSTITUTION 358, 388 (1973) (emphases omitted).
13. For a general account of the debate, see STANLEY ELKINS & ERIC MCKITRICK, THE AGE OF FEDERALISM: THE EARLY AMERICAN REPUBLIC, 1788-1800, at 229-34 (1993).
14. See generally HELEN J. PAUL, THE SOUTH SEA BUBBLE: AN ECONOMIC HISTORY OF ITS ORIGINS AND CONSEQUENCES (2011).
15. JOHN TRENCHARD & THOMAS GORDON, CATO'S LETTERS (Ronald Hamowy ed., Liberty Fund 1995) (1724).
16. Forrest McDonald, A Founding Father's Library, LITERATURE OF LIBERTY, Jan./Mar. 1978, at 4, 13;
17. see also BERNARD BAILYN, THE IDEOLOGICAL ORIGINS OF THE AMERICAN REVOLUTION 35-36 (1967)
18. see Henry St. John Bolingbroke, Some Reflections on the Present State of the Nation, reprinted in 2 THE WORKS OF LORD BOLINGBROKE 439, 454-58
19. See SAUL CORNELL, THE OTHER FOUNDERS: ANTI-FEDERALISM AND THE DISSENTING TRADITION IN AMERICA, 1788-1828, at 299-301 (1999)
20. GERALD LEONARD, THE INVENTION OF PARTY POLITICS: FEDERALISM, POPULAR SOVEREIGNTY, AND CONSTITUTIONAL DEVELOPMENT IN JACKSONIAN ILLINOIS 112-115 (2002)
21. JOEL H. SILBEY, THE AMERICAN POLITICAL NATION, 1838-1893, at 81-86 (1991)
22. See Herbert Ershkowitz & William G. Shade, Consensus or Conflict?: Political Behavior in the State Legislatures During the Jacksonian Era, 58 J. AM. HIST. 591, 594-621 (1971).
23. See generally JAMES ROGER SHARP, THE JACKSONIANS VERSUS THE BANKS: POLITICS IN THE STATES AFTER THE PANIC OF 1837 (1970).
24. see generally ROBIN L. EINHORN, AMERICAN TAXATION, AMERICAN SLAVERY (2006
25. see also Daniel M. Mulcare, Restricted Authority: Slavery Politics, Internal Improvements, andthe Limitation of National Administrative Capacity, 61 POL. RES. Q. 671, 677 (2008)
26. WILLIAM G. SHADE, DEMOCRATIZING THE OLD DOMINION: VIRGINIA AND THE SECOND PARTY SYSTEM, 1824-1861, at 84 (1996).
27. see also Joseph H. Harrison, Jr., Oligarchs and Democrats: The Richmond Junto, 78 VA. MAG. HIST. & BIOGRAPHY 184, 194-95 (1970).
28. LARRY SCHWEIKART, BANKING IN THE AMERICAN SOUTH FROM THE AGE OF JACKSON TO RECONSTRUCTION 34-37 (1987).
29. see STEPHEN F. KNOTT, ALEXANDER HAMILTON AND THE PERSISTENCE OF MYTH 31-32 (2002
30. ROBERT v. REMINI, THE LIFE OF ANDREW JACKSON 222-23 (abr. ed. 1988).
31. see L. RAY GUNN, THE DECLINE OF AUTHORITY: PUBLIC ECONOMIC POLICY AND POLITICAL DEVELOPMENT IN NEW YORK, 1800-1860, at 186-87 (1988)
32. See, e.g., JON MEACHAM, AMERICAN LION: ANDREW JACKSON IN THE WHITE HOUSE 209-10 (2008)
33. CHARLES SELLERS, THE MARKET REVOLUTION: JACKSONIAN AMERICA, 1815-1846, at 333 (1991)
34. WILLIAM GERALD SHADE, BANKS OR NO BANKS: THE MONEY ISSUE IN WESTERN POLITICS, 1832-1865, at 228-29, 233-34 (1972)
35. See GRETCHEN RITTER, GOLDBUGS AND GREENBACKS: THE ANTIMONOPOLY TRADITION AND THE POLITICS OF FINANCE IN AMERICA, 1865-1896, at 76 (1997)
36. McCulloch, 17 U.S. (4 Wheat.) at 436.
37. Weston, 27 U.S. (2 Pet.) at 469.
38. McCulloch, 17 U.S. (4 Wheat.) at 429-30.
39. Daryl J. Levinson, Framing Transactions in Constitutional Law, 111 YALE L.J. 1311, 1367-71 (2002)
40. Arthur E. Wilmarth, Jr., The OCC's Preemption Rules Exceed the Agency's Authority and Present a Serious Threat to the Dual Banking System and Consumer Protection, 23 ANN. REV. BANKING & FIN. L. 225, 240-42 (2004)
41. In Melcher v. City of Boston, 50 Mass. (9 Met.) 73 (1845
42. Bulow v. City Council, 10 S.C.L. (1 Nott & McC.) 527 (1819).
43. See State ex rel. Berney v. Tax Collector, 18 S.C.L. (2 Bail.) 654, 678-79 (1831)
44. Weston v. City Council, 27 U.S. (2 Pet.) 449, 478 (1829).
45. See GERARD N. MAGLIOCCA, ANDREW JACKSON AND THE CONSTITUTION 70-73 (2007) (describing the antebellum demise of McCulloch).
46. See Legal Tender Cases, 79 U.S. (12 Wall.) 457, 537-47 (1871).
47. 70 U.S. (3 Wall.) 573, 584 (1866)
48. Van Allen, 70 U.S. (3 Wall.) at 577, 583-84.
49. Nat'l Bank v. Kentucky, 76 U.S. (9 Wall.) 353, 362 (1870).
50. In Waite v. Dowley, 94 U.S. 527 (1877
51. See 91 U.S. 29, 32-33 (1875).
52. 188 U.S. 220, 227-28, 238-39 (1903).
53. 262 U.S. 366, 366-67, 370 (1923).
54. Farmers' & Mechs.' Nat'l Bank v. Dearing, 91 U.S. 29, 33 (1875)).
55. Thomas W. Merrill, Preemption and Institutional Choice, 102 NW. U. L. REV. 727, 730-31 (2008).
56. Easton v. Iowa, 188 U.S. 220, 231 (1903).
57. First Nat'l Bank of San Jose, 262 U.S. at 368-69.
58. Easton, 188 U.S. at 239.
59. In Davis v. Elmira Savings Bank, 161 U.S. 275 (1896
60. Nat'l Bank v. Kentucky, 76 U.S. (9 Wall.) 353, 362 (1870).
61. 164 U.S. 347, 361 (1896).
62. 199 U.S. 148, 159 (1905).
63. First Nat'l Bank of Bay City v. Fellows ex rel. Union Trust Co., 244 U.S. 416, 430 (1917) (Van Devanter, J., dissenting).
64. See IRWIN UNGER, THE GREENBACK ERA: A SOCIAL AND POLITICAL HISTORY OF AMERICAN FINANCE: 1865-1879, at 68, 68-119 (1964)
65. See SCOTT C. JAMES, PRESIDENTS, PARTIES, AND THE STATE: A PARTY SYSTEM PERSPECTIVE ON DEMOCRATIC REGULATORY CHOICE, 1884-1936, at 44-45 (2000).
66. see generally GERARD N. MAGLIOCCA, THE TRAGEDY OF WILLIAM JENNINGS BRYAN: CONSTITUTIONAL LAW AND THE POLITICS OF BACKLASH (2011).
67. See EDMUND MORRIS, THEODORE REX 339 (2001).
68. see ROBERT F. BRUNER & SEAN D. CARR, THE PANIC OF 1907: LESSONS LEARNED FROM THE MARKET'S PERFECT STORM 13-49 (2007).
69. See RICHARD T. MCCULLEY, BANKS AND POLITICS DURING THE PROGRESSIVE ERA: THE ORIGINS OF THE FEDERAL RESERVE SYSTEM, 1897-1913, at 280-81 (1992)
70. See ELMUS WICKER, THE GREAT DEBATE ON BANKING REFORM: NELSON ALDRICH AND THE ORIGINS OF THE FED ch. 4 (2005).
71. see NELSON W. ALDRICH ET AL., NAT'L MONETARY COMM'N, REPORT OF THE NATIONAL MONETARY COMMISSION, S. DOC. NO. 62-243 (2d Sess. 1912).
72. See LOUIS D. BRANDEIS, OTHER PEOPLE'S MONEY AND HOW THE BANKERS USE IT 51-52 (1914)
73. RON CHERNOW, THE HOUSE OF MORGAN 152-58 (1990).
74. First Nat'l Bank in St. Louis v. Missouri, 263 U.S. 640, 656-59 (1924).
75. 292 U.S. 559, 565-70 (1934).
76. 306 U.S. 103, 104-10 (1939).
77. 321 U.S. 233, 241-42 (1944).
78. anderson Nat'l Bank, 321 U.S. at 247-48.
79. See, e.g., Fed. Land Bank of St. Paul v. Bismarck Lumber Co., 314 U.S. 95, 99-101 (1941)
80. See, e.g., Deitrick v. Greaney, 309 U.S. 190, 200-01 (1940)
81. See, e.g., United States v. Am. Trucking Ass'ns, 310 U.S. 534, 542 (1940)
82. Compare D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 456-61 (1942)
83. Southern Pacific Co. v. Jensen, 244 U.S. 205, 221 [(1917)])
84. See, e.g., California v. Coast Fed. Sav. & Loan Ass'n, 98 F. Supp. 311, 319 (S.D. Cal. 1951)
85. 517 U.S. 25 (1996).
86. Watters v. Wachovia Bank, 550 U.S. 1, 11 (2007)
87. Mechs.' Nat'l Bank v. Dearing, 91 U.S. 29, 34 (1875)).
88. Arthur E. Wilmarth, Jr., The Dodd-Frank Act's Expansion of State Authority to Protect Consumers of Financial Services, 36 J. CORP. L. 893, 936-37 (2011)
89. Brief for the Federal Respondent at 42, Clearing House, 557 U.S. 519 (No. 08-453), 2009 WL 815241.
90. Brief for the Federal Respondent at 42, Clearing House, 557 U.S. 519 (No. 08-453), 2009 WL 815241.
91. See Lebron v. Nat'l R.R. Passenger Corp., 513 U.S. 374, 400 (1995)
92. Henry N. Butler & Jonathan R. Macey, The Myth of Competition in the Dual Banking System, 73 CORNELL L. REV. 677, 685 (1988)
93. See NICHOLAS PARRILLO, AGAINST THE PROFIT MOTIVE: THE SALARY REVOLUTION IN AMERICAN GOVERNMENT, 1780-1940
94. see Nicholas Parrillo, The De-Privatization of American Warfare: How the U.S. Government Used, Regulated, and Ultimately Abandoned Privateering in the Nineteenth Century, 19 YALE J.L. & HUMAN. 1 (2007).
95. See 295 U.S. 495, 503 (1935)
96. see also Carter v. Carter Coal Co., 298 U.S. 238, 311 (1936)
97. McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 430 (1819).
98. Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U.S. 218, 223 (1928)
99. See 306 U.S. 466, 487 (1939)
100. 519 U.S. 213, 221 (1997).
101. See Nicholas Bagley, Note, The Unwarranted Regulatory Preemption of Predatory Lending Laws, 79 N.Y.U. L. REV. 2274, 2277-78 (2004)
102. Bank Activities and Operations; Real Estate Lending and Appraisals, 69 Fed. Reg. 1904, 1908 (Jan. 13, 2004).
103. Bank Activities and Operations, 69 Fed. Reg. 1895, 1896 (Jan. 13, 2004).
104. Kurns v. R.R. Friction Prods. Corp., 132 S. Ct. 1261, 1269 (2012)
105. Trades Council v. Garmon, 359 U.S. 236, 247 (1959)).
106. Bank Activities and Operations; Real Estate Lending and Appraisals, 69 Fed. Reg. 1904, 1908 (Jan. 13, 2004).
107. Morales v. Trans World Airlines, 504 U.S. 374, 386 (1992).
108. Cf. O'Melveny & Myers v. FDIC, 512 U.S. 79, 88 (1994)
109. Bank Activities and Operations, 69 Fed. Reg. 1895, 1896 (Jan. 13, 2004).
110. See, e.g., Letter from John D. Hawke, Jr., Comptroller of the Currency, to Sen. Paul S. Sarbanes 2-3 & n.3, 4 & n.15 (Dec. 9, 2003), available at http://www.occ.gov/static/enforcementactions/SarbanesPreemptionletter.pdf.
111. McClellan v. Chipman, 164 U.S. 347, 358 (1896).
112. 589 F.3d 274 (6th Cir. 2009).
113. Monroe Retail, 589 F.3d at 282.
114. Bank Activities and Operations, 69 Fed. Reg. 1895, 1896 (Jan. 13, 2004).
115. See, e.g., Green v. Bock Laundry Machine Co., 490 U.S. 504, 509-10 (1989)
116. See, e.g., Wells Fargo Bank v. Boutris, 419 F.3d 949, 965-66 (9th Cir. 2005)
117. See, e.g., Rose v. Chase Bank USA, 513 F.3d 1032, 1036-37 (9th Cir. 2008)
118. See, e.g., Nat'l City Bank of Ind. v. Turnbaugh, 463 F.3d 325, 331-33 (4th Cir. 2006)
119. Wells Fargo Bank of Tex. v. James, 321 F.3d 488, 495 (5th Cir. 2003)
120. Bank of Am. v. City and County of San Francisco, 309 F.3d 551, 566 (9th Cir. 2002)
121. Discover Bank v. Vaden, 489 F.3d 594, 605-06 (4th Cir. 2007
122. Rev'd on other grounds, 556 U.S. 49 (2009).
123. See Georgia Fair Lending Act, GA. CODE ANN. 7-6A-1 to -13 (2012
124. Salvador v. Bank of Am. (In re Salvador), 456 B.R. 610
125. See, e.g., Gerber v. Wells Fargo Bank, No. 11-01083, 2012 WL 413997, at 4-9
126. Real Estate Lending and Appraisals, 69 Fed. Reg. 1904, 1908 ( Jan. 13, 2004).
127. See, e.g., Gerber v. Wells Fargo Bank, No. 11-01083, 2012 WL 413997, at 4-9
128. See, e.g., Conrad v. Wells Fargo Bank, No. 08-0829, 2009 WL 36478, at 2-3
129. Moore v. Wells Fargo Bank (In re Moore), 470 B.R. 390, 396
130. See, e.g., Arevalo v. Bank of Am., 850 F. Supp. 2d 1008, 1024-28
131. See, e.g., Cline v. Bank of Am., 823 F. Supp. 2d 387, 398-99
132. Smith v. BAC Home Loans Servicing, 769 F. Supp. 2d 1033, 1046-47
133. See, e.g., Hood v. Santa Barbara Bank & Trust, 49 Cal. Rptr. 3d 369, 382-83 (Ct. App. 2006)
134. Austin v. Provident Bank, No. 04-00033, 2005 WL 1785285, at 6
135. Barnett Bank, 517 U.S. at 32-38.
136. 321 U.S. 233 (1944).
137. Barnett Bank, 517 U.S. at 33
138. (citing Luckett, 321 U.S. at 247-52).
139. See, e.g., Oren Bar-Gill & Elizabeth Warren, Making Credit Safer, 157 U. PA. L. REV. 1, 86-95 (2008)
140. Vincent Di Lorenzo, Federalism, Consumer Protection and Regulatory Preemption: A Case for Heightened Judicial Review, 10 U. PA. J. BUS. & EMP. L. 273, 281 (2008)
141. Arthur E. Wilmarth, Jr., Cuomo v. Clearing House: The Supreme Court Responds to the Subprime Financial Crisis and Delivers a Major Victory for the Dual Banking System and Consumer Protection
142. Victoria Nourse, Misunderstanding Congress: Statutory Interpretation, the Supermajoritarian Difficulty, and the Separation of Powers, 99 GEO. L.J. 1119, 1129-30 (2011
143. see Press Release, Nat'l Consumer Law Ctr., Statement of NCLC Managing Attorney Lauren Saunders on OCC Final Preemption Rule (July 20, 2011), available at http://www.nclc.org/images/pdf/preemption/occ-preemption-statement.pdf
144. Dodd-Frank Act Implementation, 76 Fed. Reg. 43,549, 43,553 (July 21, 2011).
145. office of Thrift Supervision Integration; Dodd-Frank Act Implementation, 76 Fed. Reg. at 43,566.
146. Farmers' & Mechs.' Nat'l Bank v. Dearing, 91 U.S. 29 (1875).
147. Easton v. Iowa, 188 U.S. 220 (1903).
148. First Nat'l Bank in St. Louis v. Missouri, 263 U.S. 640 (1924).
149. Bank Activities and Operations, 69 Fed. Reg. 1895, 1899 ( Jan. 13, 2004).
150. See First Nat'l Bank in St. Louis, 263 U.S. at 662-68
151. see SUSAN HOFFMANN, POLITICS AND BANKING: IDEAS, PUBLIC POLICY, AND THE CREATION OF FINANCIAL INSTITUTIONS 169-73 (2001).
152. See generally C. LOWELL HARRISS, HISTORY AND POLICIES OF THE HOME OWNERS' LOAN CORPORATION (1951) (providing a history of HOLA).
153. See, e.g., Waterbury Sav. Bank v. Danaher, 20 A.2d 455, 463-64 (Conn. 1940)
154. See California v. Coast Fed. Sav. & Loan Ass'n, 98 F. Supp. 311, 319 (S.D. Cal. 1951)
155. Bank Activities and Operations; Real Estate Lending and Appraisals, 69 Fed. Reg. 1904, 1910 (Jan. 13, 2004).
156. office of Thrift Supervision Integration; Dodd-Frank Act Implementation, 76 Fed. Reg. 43,549, 43,556 (July 21, 2011).
157. See, e.g., White v. Wachovia Bank, 563 F. Supp. 2d 1358, 1369 (N.D. Ga. 2008)
158. Great W. Res. v. Bank of Ark., No. 05-5152, 2006 WL 626375, at 3-4 (W.D. Ark. Mar. 13, 2006)
159. see Kristin E. Hickman & Matthew D. Krueger, In Search of the Modern Skidmore Standard, 107 COLUM. L. REV. 1235, 1251- 59 (2007).
160. See Peter L. Strauss, "Deference" is Too Confusing-Let's Call Them "Chevron Space" and "Skidmore Weight," 112 COLUM. L. REV. 1143, 1145 (2012)
161. Dodd-Frank Act Implementation, 76 Fed. Reg. 43,549, 43,557 (July 21, 2011)
162. see Catherine M. Sharkey, Federalism Accountability: "Agency- Forcing" Measures, 58 DUKE L.J. 2125, 2155-56 (2009)
163. and Catherine M. Sharkey, Products Liability Preemption: An Institutional Approach, 76 GEO. WASH. L. REV. 449, 477-84 (2008).
164. Catherine M. Sharkey, Colloquy, What Riegel Portends for FDA Preemption of State Law Products Liability Claims, 103 NW. U. L. REV. 437, 441 (2009).
165. See, e.g., N.Y. EDUC. LAW 6437 (McKinney 2010)
166. office of Thrift Supervision Integration; Dodd-Frank Act Implementation, 76 Fed. Reg. 43,549, 43,557 ( July 21, 2011).
167. See Roderick M. Hills, Jr., Against Preemption: How Federalism Can Improve the National Legislative Process, 82 N.Y.U. L. REV. 1, 29-32 (2007)
168. David A. Kessler & David C. Vladeck, A Critical Examination of the FDA's Efforts to Preempt Failure-to-Warn Claims, 96 GEO. L.J. 461, 477 (2008)
169. See JOEL D. ABERBACH ET AL., BUREAUCRATS AND POLITICIANS IN WESTERN DEMOCRACIES 102-14 (1981)
170. See Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341, 347-48 (2001)
171. See anderson Nat'l Bank v. Luckett, 321 U.S. 233, 248-52 (1944).
172. See Checking Account Overdraft Litig., 694 F. Supp. 2d at 1313-14.
173. Barnett Bank of Marion Cnty. v. Nelson, 517 U.S. 25, 28-29 (1996).
174. See Bank of Am. v. City & County of San Francisco, 309 F.3d 551, 561 (9th Cir. 2002)