(Slate) – In 2012, New York City passed the Responsible Banking Act. The law called for a local board to review banking services every two years, with particular attention to how banks with more than $6 billion in city deposits were serving low- and middle-income communities. The board would evaluate these financial institutions, publish an annual report, and detail “progress or areas where improvement is needed.”
Except now the board won’t be doing any of this, because a federal court on Monday ruled the law unconstitutional. “While the animating concerns of the City Council are valid, the means by which it sought to harness banks to redress those concerns intrudes on the province of the federal and state governments,” the U.S. district judge on the case wrote. And a bit more from Reuters:
The city’s lawyers had argued the law was simply intended to promote “transparency,” but Failla agreed with the plaintiffs that it was an attempt to “advance policy objectives” by coercing banks’ behavior, which infringed upon the federal and state governments’ regulatory powers.