Banks Beat Back New York City Regulation

The New York Bankers Association (NYBA) scored a win over the City of New York in federal court last week.  In NYBA v. City of New York,  the court granted NYBA's motion for summary judgment.  The District Court for the Southern District of New York found that City Local Law 38 (the Responsible Banking Act) was preempted by both federal and state law.   The RBA would have required New York banks to submit information to a community advisory board, which would in turn submit a report to the City Banking Commission for its consideration in deciding whether to permit the banks to accept any part of New York City's $6 billion in deposits.  The opinion sets out the long and fascinating history of the legislation through two mayoral administrations (Bloomberg who thought it was both misguided and preempted, and De Blasio who supported it).