Yesterday, lawyers representing the state of New York asked the Supreme Court to let states enforce their anti-discrimination laws against national banks. Four years ago, then the New York attorney general Eliot Spitzer, asked several national banks to explain why they were disproportionately and significantly charging blacks and Hispanics high interest rates than whites. As a result, as big banks do to keep folk from seeing they dirt they practice, they filed a lawsuit. Not just the banks, but also the Treasury Department agency that regulates them.
And what happened was something out of the days of the civil rights movement or Jim Crow - a federal judge said that states could not enforce state fair-lending and antidiscrimination laws against national banks by enforcing fair lending laws against them. If that aint some of the dumbest stuff I have ever heard. So it is ok for states to make laws that could be used to investigate illegal actions at banks that function inside their state, but only the federal government can enforce such when it comes to national banks.
Yep, the federal government says they are the only folk that can regulate national financial institutions. But the strange thing is that the Federal Government (which can’t get the SEC to work) doesn't have the manpower or the knowledge of the various state laws, I mean there are 50 states, not to mention that according to recent data, they - Office of the Comptroller of the Currency, only have 10 folk working on enforcement. The case (Cuomo v. The Clearing House Association, 08-453) has the Federal government arguing that by allowing each state to enforce their own fair lending and ant discrimination laws, would get in the way of federal government's supervisory powers.
So in other words, we not only bail out these national banks with no oversight, but also put their interest and protection over the American citizen since states are not able to implement any form of consumer protection and regulatory oversight regarding mortgage lending practices. The use the out dated National Bank Act of 1863 to support their position.
Maybe I am just nit picking, but I think there is something inherently backwards about not being able to enforce nationally established laws (fair lending and ant-discrimination) when America’s history is replete with such and when not doing such makes the constitution worthless. I guess all men are created equal but not all banks. I hope our president can engage his administration to put this on the radar. All he will need is one Executive Order or Presidential Decision Directive, but then again who asked me?
