A group of Democrats in the U.S. Senate introduced a bill last week that would allow state attorneys general and other state law enforcers to issue subpoenas during investigations to ensure compliance with state law by national banks.
The legislation, called the Accountability for Wall Street Executives Act of 2017, is sponsored by Sens. Dianne Feinstein (D-CA), Kamala Harris (D-CA), Elizabeth Warren (D-MA), and Richard Blumenthal (D-CT).
“Bank fraud and other financial crimes have affected consumers in every state, including California,” Feinstein said. “State attorneys general should have all the tools they need to investigate potential violations of state laws. This bill will help them hold banks accountable, protect consumers and preserve the integrity of our financial system.”
Specifically, the measure would give attorneys general the authority to conduct visitorial oversight of federally-chartered national banks. Further, it would amend language in the National Bank Act that the Supreme Court interpreted as limiting the visitorial powers of state law enforcers when addressing compliance with state law by national banks.
In addition, it would give the AGs the power to issue subpoenas for suspected violations of real estate lending laws. Finally, it adds an extra layer of consumer protections to ensure federally-chartered banks are complying with state financial protection laws and avoiding risky bets that might contribute to the financial crisis.
“State law enforcement should be empowered with the tools they need to protect Americans from Wall Street abuse and fraudulent behavior by national banks,” Harris said. “As a former attorney general, I know how critical it is to conduct a thorough investigation in order to identify fraud and hold bad actors accountable. This will help ensure national banks are complying with state law and avoiding the type of illegal behavior that led to the Great Recession.”
Warren added that it is critical for state attorneys general to have the tools they need to hold banks accountable for breaking those laws.
“As a former Connecticut Attorney General, I respect the essential partnerships that exist between state and federal officials,” Blumenthal said. “This crucial measure closes a loophole in financial protection oversight to allow state attorneys general to combine forces with federal law enforcement to prevent the type of abuse and immorality by Wall Street that led to the Great Recession. Congress must restore key enforcement powers to state attorneys general immediately for fully comprehensive protection against unlawful financial activity.”