Comptroller of the Currency Eugene A. Ludwig is under fire in Congress, but his power to expand the national bank charter has been unanimously, and repeatedly, supported by the Supreme Court.
Lawyers and industry officials said the comptroller's string of legal victories - capped by Monday's high court decision on credit card fees - should help bankers fight off legislative attempts to limit the agency's authority. In addition, this success in the courts may embolden the Office of the Comptroller of the Currency to bestow even greater powers on national banks.
In four cases over the last two years, the Supreme Court has deferred to the OCC interpretation of the National Bank Act, saying Congress intended for the agency to settle all ambiguities in the statute.
"This should put to rest any notion that the OCC proceeds through legal loopholes," Mr. Ludwig said Wednesday in an interview. "They are reaffirming that we were acting within our authority."
Though thrilled with his agency's vindication, Mr. Ludwig was careful not to flaunt his adversaries and refused to say what plans he has for the national bank charter.
The OCC's streak began in June 1994. The Supreme Court said the agency correctly ruled that Congress did not inadvertently repeal part of the National Bank Act. Next came the so-called Valic case, in which the justices upheld the OCC's determination that banks can sell annuities.
The Supreme Court ruled in February that the OCC was correct when it said national banks could ignore restrictions on bank insurance sales in small towns. Monday's decision affirmed the comptroller's determination that late fees are considered interest.
This track record is expected to strengthen the industry's resolve to fight Rep. Jim Leach's Glass-Steagall reform bill, which is scheduled for a vote today.
"The banking industry has no need for legislative fixes because of its strong record in the courts," said William J. Sweet Jr., a partner at the Washington law firm of Skadden, Arps, Slate, Meagher & Flom.
Kenneth Guenther, executive vice president of the Independent Bankers Association of America, said a legislative fix could actually cause more harm then good. The Iowa Republican's bill includes new insurance restrictions and a Senate version likely would contain even more constraints, he said.
"It is a crap shoot for banks to believe that pro-banking legislation will emerge from this process," Mr. Guenther said. "Banks are far better off putting their marbles with the Comptroller of the Currency."
But Edward L. Yingling, chief lobbyist for the American Bankers Association, said the rulings in favor of the OCC won't affect debate on the bill.
"While we love the court decision on its merits, I don't think it will have much effect," he said.
Experts said the decision goes well beyond today's political battle. The decision frees the OCC to further expand the types of products and services banks can offer, they said.
Stephen Blumenthal, an institutional investment adviser with Washington Research Group, said the four rulings could give the agency new resolve to push forward with its plan to allow banks to underwrite securities from subsidiaries.
"This is a green light from the Supreme Court that says if Congress doesn't act, then you are free to do what you want," Mr. Blumenthal said.
The court's decisions also should cause lower courts to think twice before ruling against the OCC in future bank powers cases, said David Roderer, a partner at Winston & Strawn. "I was surprised by the breadth of the decision," he said. "That is probably the most significant part."
