First Union National Bank v. Burke

First Union National Bank (First Union) and Fleet Bank, N.A. (Fleet) (plaintiffs) were national banks that operated automated teller machines (ATMs) within the State of Connecticut. First Union and Fleet imposed surcharge fees for the use of their ATMs by persons who were not depositors at their respective banks. The Connecticut Banking Commissioner, John Burke (the commissioner) (defendant) issued administrative cease-and-desist orders to First Union and Fleet to stop imposing surcharge fees or they would face fines for each violation. First Union and Fleet responded by filing separate actions against the commissioner, seeking injunctive relief prohibiting the commissioner from enforcing his order. The Office of the Comptroller of the Currency (the comptroller) intervened in these actions to preserve its exclusive authority to enforce all state and federal banking laws against national banks. The comptroller filed a motion for a preliminary injunction, and the commissioner filed a motion to dismiss. The comptroller argued that the commissioner’s attempt to bring administrative enforcement actions against national banks was preempted by the comptroller’s visitorial, or oversight, powers. The comptroller also argued that the Electronic Funds Transfer Act actually preserved federal authority over administrative enforcement actions rather than granting states an independent enforcement power as argued by the commissioner. The commissioner argued that ATM transactions between a national bank and a nondepositor did not constitute banking business, so those transactions were outside the comptroller’s exclusive regulatory authority. The commissioner also argued that the preclusion of state enforcement of state law violated the Tenth Amendment to the United States Constitution. The court considered both the comptroller’s motion for a preliminary injunction and the commissioner’s motion to dismiss.