NYT OP ED: Who’s Watching Your Money?

By ROBERT M. MORGENTHAU

IN a ruling this month, the United States Supreme Court upheld an ill-advised regulation issued by the Office of the Comptroller of the Currency that exempted subsidiaries of national banks from regulation by state banking authorities. This regulation makes the comptroller the exclusive regulator of these banks, even though the office is financed almost entirely by the banks it oversees.

In the case, Watters v. Wachovia Bank, the court held that the National Bank Act barred Michigan’s bank regulator from overseeing the activities of the mortgage-lending subsidiary of Wachovia, a national bank, even though the subsidiary itself was a state-chartered institution. The court thus rejected the arguments of the attorneys general and bank regulators in all 50 states.