New York City's "responsible banking" law ruled unconstitutional after lawsuit from Bank of America, Goldman Sachs, JPMorgan

Clara Guibourg
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Rules about to easen up? (Source: Getty)

Is New York City’s notoriously tough line on banks after the crisis about to loosen up?

The city’s Responsible Banking Act has been ruled unconstitutional by a federal judge, reports news agency Reuters.

The law demanded that banks provide documentation for an advisory board to review how well they met the needs of low- and moderate-income neighbourhoods, but US district judge Katherine Polk Failla ruled that, although the city’s concerns were valid, this conflicted with federal laws:

The means by which it sought to harness banks to redress those concerns intrudes on the province of the federal and state governments.

The power to regulate banks lies not with city council but with federal and state governments. The law had been challenged by the New York Bankers Association (NYBA), with more than 150 members including Bank of America, Goldman Sachs and JPMorgan.

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