A federal judge on Friday struck down New York City’s Responsible Banking Act, holding the city preempted by state and federal banking laws.
The ordinance required deposit banks to disclose information about how the banks serve low-income neighborhoods. Under the ordinance, the information would be published and factor into whether banks would remain eligible to hold city deposits.
The New York Bankers Association challenged the ordinance in the US District Court for the Southern District of New York. In a 71-page opinion, the court held that the ordinance is directed at regulating, more than a disclosure, that it conflicts with federal law insofar as it applies to federally chartered banks, and if field preempted by New York state law insofar as it applies to NY state-chartered banks. The court found that the preempted provisions could not be severed from other parts of the ordinance and declared the entire law void.
The opinion is here.