## Facts

- Two national banks operated ATMs in Connecticut and charged surcharge fees to non-depositors using those ATMs.
- After consumer complaints, the Connecticut Banking Commissioner investigated and concluded the surcharges violated Connecticut banking law.
- The Commissioner issued administrative cease-and-desist orders requiring the banks to stop imposing ATM surcharges on non-depositors and threatened per-transaction penalties for noncompliance.
- The banks filed federal actions seeking to enjoin the Commissioner from enforcing the administrative orders.
- The Office of the Comptroller of the Currency (OCC) intervened, asserting exclusive federal “visitorial” and administrative enforcement power over national banks, including as to compliance with applicable state banking laws.
- The OCC sought a preliminary injunction to halt the state administrative enforcement proceedings; the Commissioner moved to dismiss on jurisdictional, abstention, merits, and Tenth Amendment grounds.

## Issues

1. Whether federal banking law gives the OCC exclusive visitorial and administrative enforcement authority over national banks, precluding a state banking commissioner from pursuing administrative cease-and-desist proceedings against them.
2. Whether the Electronic Funds Transfer Act authorizes or preserves state administrative enforcement against national banks for ATM-related practices.
3. Whether ATM services and surcharge fees are part of the “business of banking” within the OCC’s visitorial and enforcement authority.
4. Whether limiting state administrative enforcement against national banks, even for alleged violations of state banking law, violates the Tenth Amendment.

## Decision

- The court denied the Commissioner’s motion to dismiss.
- The court granted the OCC’s motion for a preliminary injunction.
- The court held that the OCC has exclusive visitorial and administrative enforcement authority over national banks, including with respect to enforcing applicable state banking laws.
- The court enjoined the Commissioner from continuing state administrative enforcement proceedings (including cease-and-desist orders) against the national banks regarding ATM surcharge practices.

## Legal Principles

- Federal law assigns exclusive visitorial and administrative enforcement authority over national banks to the OCC; state officials may not directly conduct administrative enforcement actions against national banks.
- State laws may be substantively applicable to national banks, but state administrative enforcement of those laws against national banks is displaced where Congress channels enforcement through the OCC.
- The Electronic Funds Transfer Act does not confer independent state administrative enforcement authority over national banks; enforcement remains within the designated federal agency framework.
- ATM services and related fees are within the “business of banking” for purposes of federal supervisory and enforcement authority.
- Centralizing administrative enforcement in the OCC for national banks does not violate the Tenth Amendment because Congress may define the supervisory structure for federally chartered banks while leaving state law substantively operative.

## Conclusion

The court concluded that Connecticut’s banking commissioner could not use state administrative proceedings to stop national banks from charging ATM surcharges, because the OCC holds exclusive visitorial and administrative enforcement authority over national banks, and it enjoined the commissioner’s enforcement actions accordingly.


First Union Nat'l Bank v. Burke, 48 F. Supp. 2d 132 (D. Conn. 1999)