States can play role in regulating banks, court finds
Kevin G. Hall - McClatchy NewspapersIssue date: 6/25/09 Section: Real News
Spitzer and Cuomo were concerned that white borrowers appeared routinely to be given lower interest rates than blacks and Hispanics. Their hunch was later proved correct, as poor underwriting standards and the explosion of adjustable-rate subprime mortgages - those given to borrowers with the weakest credit, most often minorities - combined to create record foreclosures.
Losses in mortgage finance morphed into a global credit crisis, bringing down venerable investment banks including Bear Stearns and Lehman Brothers and insurer American International Group. The rest is history.
"The Supreme Court has once again been required to act as a check against the former Bush administration's attempt to prohibit state law from protecting consumers. In holding that the OCC regulation at issue in Cuomo was invalid, the Court has reaffirmed the authority of the sovereign states to police corporate actors within a state, and protect their citizens," said Sen. Patrick Leahy, D-Vt., the chairman of the Judiciary Committee, in a statement. "And the Court has rightly rejected the national banks' attempt to hide behind an unreasonable agency regulation in order to escape scrutiny from state authorities."
Losses in mortgage finance morphed into a global credit crisis, bringing down venerable investment banks including Bear Stearns and Lehman Brothers and insurer American International Group. The rest is history.
"The Supreme Court has once again been required to act as a check against the former Bush administration's attempt to prohibit state law from protecting consumers. In holding that the OCC regulation at issue in Cuomo was invalid, the Court has reaffirmed the authority of the sovereign states to police corporate actors within a state, and protect their citizens," said Sen. Patrick Leahy, D-Vt., the chairman of the Judiciary Committee, in a statement. "And the Court has rightly rejected the national banks' attempt to hide behind an unreasonable agency regulation in order to escape scrutiny from state authorities."
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