Massachusetts Bankers Association Preemption Litigation

The US District Court for the District of Massachusetts ruled that certain Massachusetts state laws affecting the ability of national banks and federal savings associations to sell, solicit and cross-market insurance in Massachusetts are preempted by Section 104 of the Gramm-Leach-Bliley Act of 1999 ("GLBA"). In August 2003, Goodwin Procter commenced a declaratory judgment action on behalf of the Massachusetts Bankers Association, Inc. and several federally- and state-chartered banks against the Massachusetts commissioners of banks and insurance. The complaint alleged that the Massachusetts statutes significantly interfered with federally protected rights of national banks and federal savings associations to market and sell insurance. The complaint also asserted an Equal Protection claim on behalf of state banks. The statutes effectively prohibited bank employees from referring bank customers to a bank’s insurance affiliate and barred banks from compensating bank employees for making