Sheppard Mullin Financial Institutions Law Blog

On June 19, 2006, the Supreme Court agreed to decide whether states can apply their lending rules to national banks that are currently regulated by the U.S. Comptroller of the Currency, and operating subsidiaries of those national banks. A "yes" answer could open national banks and their operating subsidiaries, as well as other federally chartered institutions, to a host of new state-specific rules and oversight procedures.

Question: Does the preemptive authority of a federally chartered thrift extend to its exclusive agents?

Answer: Yes, according to the U.S. District Court for the District of Connecticut in State Farm Bank, F.S.B. v. Burke, D. Conn., No. 3:05 cv 808, order filed 6/21/06.

Question: Does the Gramm-Leach-Bliley Act prohibit an employee of a financial institution from working with sensitive personal financial information on a laptop computer at home, or at least require that such information be encrypted? 

Answer: No, according to the Minnesota federal court in Guin v. Brazos Higher Education Service Corp. Inc. (D. Minn. 2006) WL 288483.