Agenda - Planning Commission - 03/01/2012

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January 10, 2012 1 Volume 6 I No. 1 Zoning Bulletin Finding there were no material issues of fact in dispute, and deciding the matter on the law alone, the Supreme Court granted summary judgment in favor of the Town. The court found that the state legislature had not in- tended to occupy the field of regulating check - cashing establishments. The Operators appealed. DECISION: Reversed, and matter remitted. The Supreme Court, Appellate Division, Second Department, New York, held that Section 302(K) conflicted with, and thus was preempted by, state Banking Law. In so holding, the court explained that although local governments have broad police powers relating to the welfare of their citizens, local govern- ments cannot adopt laws that are inconsistent with the Constitution or with any general law of the state. Thus, the power of local governments to enact laws is subject to the fundamental limitation of the preemption doctrin Generally, state preemption. occurs either: (1) under conflict pre- emption, where a local law prohibits what a state law explicitly allows, or when a state law prohibits what a local law explicitly allows; or (2) under field preemption, where "a local law regulating the same subject matter [as a state law} is deemed inconsistent with the State's transcendent interest, whether or not the terms of the local law actually conflict with a State- wide statute." Field preemption, further explained the court, can apply under any of three different scenarios: (1) when an "express statement in the state statute explicitly avers that it preempts all local laws on the same subject matter "; (2) where a "declaration of state policy evinces the intent of the Legislature to preempt local laws on the same subject matter "; or (3) where the "Legislature's enactment of a comprehensive and detailed regulatory scheme in an area in controversy is deemed to demonstrate an intent to preempt local laws." To determine whether Section 302(K) was preempted by state law, the court examined certain provisions of the Banking Law. Article 9 -A of the Banking Law pertaining to "Licensed Cashers of Checks" explicitly granted the superintendent of banks (the "Superintendent") the author- ity to "provide for the regulation of the business of cashing checks. Sec- tion 369 of the Banking Law addressed conditions precedent to the issu- ance of a license. Under Section 369(1), those seeking to obtain a license to cash checks had to submit a "business plan," which had to include: a description of the primary market area; a description of the customer base; proposed days and hours of operation; types of services to be offered; a detailed description of demographics of the area; a description of any pro- posed economic development area; and specific marketing targets. The court found that, under the clear language of Banking Law § 369(1), . the Superintendent was vested with the duty to determine: whether each ap- _ plicant for a check- cashing license proposes, to perform that function in an appropriate location; whether there was is a community need for a new licensee in that location; and whether the granting of such an application will be advantageous to the public. 8 © 2012 Thomson Reuters