In OCC v, Spitzer, the Office of the Comptroller of the Currency, an obscure but powerful federal bank regulator, as we note on a special website, OCCWatch, that tracks its activities, successfully challenged New York Attorney General Eliot Spitzer's authority to even investigate possible discriminatory practices by national banks. OCC, as it often does, acted in concert with a group of large financial institutions. In this case, OCC had the back of its patrons at the Clearinghouse, which had filed a parallel case.

The article's title reference to Chevron refers to an important Supreme Court standard from the 1984 case Chevron v. Natural Resources Defense Council describing when a court should rely on, and show deference to, an administrative agency's interpretation of the law. In the article, Professor Wilmarth raises significant Constitutional questions about the ruling. He argues that agencies aren't supposed to get deference for their purely political decisions, nor on matters of preemption, nor, more broadly, should they get deference when Congress has not clearly granted them authority:

The reasoning of the District Court--and of three other federal courts that recently upheld another OCC preemptive rule--suggests that the OCC can rely on Chevron deference as a sufficient basis to expand its jurisdiction, and to alter the balance of federal-state authority, without any clear expression of supporting congressional intent. The Supreme Court's recent decision in Gonzales v. Oregon, which rejected a similar, open-ended claim for deference by the United States Attorney General, makes clear that all four decisions are based on an erroneous understanding of Chevron.

Professor Wilmarth says that

the OCC's regulation should be rejected for the same reason that the Supreme Court struck down the United States Attorney General's interpretive rule in Gonzales v. Oregon--namely, that the regulation conflicts with the "ordinary meaning" and "commonsense" application of the governing statute.

In that case, where the Court rejected Attorney General Alberto Gonzales and his challenge to Oregon's Death With Dignity Act, Justice Kennedy's majority opinion makes numerous references to the limits of Chevron deference, for example:

Although balancing the necessary respect for an agency's knowledge, expertise, and constitutional office with the courts' role as interpreter of laws can be a delicate matter, familiar principles guide us. An administrative rule may receive substantial deference if it interprets the issuing agency's own ambiguous regulation. Auer v. Robbins, 519 U. S. 452, 461-463 (1997). An interpretation of an ambiguous statute may also receive substantial deference. Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 842-845 (1984). Deference in accordance with Chevron, however, is warranted only "when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority." United States v. Mead Corp., 533 U. S. 218, 226-227 (2001). Otherwise, the interpretation is "entitled to respect" only to the extent it has the "power to persuade." Skidmore v. Swift & Co., 323 U. S. 134, 140 (1944).

Unfortunately, the OCC's patrons have a lot of juice on Capitol Hill, so our best bet is the courts. However, two bills, HR 3426 and S 1502, the companion Preservation of Federalism In Banking Acts would roll back OCC's abusive power grab that prevents states from protecting their citizens from unfair banking practices.