Obama Backs Banks, Seeks to Block State Fair-Lending Crackdown

[spotbird]

Source: Bloomberg

March 26 (Bloomberg) -- The Obama administration’s call for greater financial regulation may have its limits.

The administration late yesterday urged the Supreme Court to bar New York and other states from enforcing their fair- lending and other consumer-protection laws against federally chartered banks including JPMorgan Chase & Co. and Wells Fargo & Co.

The legal brief, which adopts the Bush administration’s position, is a setback for consumer and civil-rights groups that had urged President Barack Obama’s team to switch positions. The filing puts the administration at odds with New York Attorney General Andrew Cuomo over the respective roles of state and federal regulators. The high court will hear arguments April 28.


Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aCdEKIwbiPzQ&refer=home

[Eric J in MN]

1. So according to Obama, states have no power to investigate racial discrimination in lending. NT

NT

[madrchsod]

3. according to the supremes and obama---interesting bedfellows

[madrchsod]

2. the fix has been in since 2007

the supreme court will rule as they did before...rule in favor of the banks.

[ElsewheresDaughter]

4. WOW that sucks hard!

[elleng]

5. '"National banks are created

by the government to serve federal purposes,” argued Solicitor General Elena Kagan, the Obama administration’s top courtroom lawyer. She said that “oversight of the banks is therefore principally entrusted to the United States.”

The court filing coincides with this week’s proposal by the administration to put large hedge funds, private-equity firms and derivatives under federal supervision for the first time.

Cuomo is seeking to revive an investigation, begun by predecessor Eliot Spitzer, into the real-estate lending practices of units of JPMorgan, Wells Fargo and HSBC Holdings Plc. A lower court barred the probe, saying a regulation issued by the U.S. Office of the Comptroller of the Currency blocks state scrutiny of national banks.

The case will determine whether federal regulators have exclusive government authority to press fair-lending and other types of complaints against national banks. More broadly, the case will shape how much ability agencies have to shield companies from state-level scrutiny.'

[closeupready]

6. What a shame.

He claims he wants to be change and talks about values - then does something else.

[spotbird]

7. And there is no one to complain

The pittance of oversight is gone.

[elleng]

8. This is one of many disputes

arising from the type of government we have: a Federal system. There are MANY areas where states want to make laws and the Federal government wants to make laws, and/or already has. Its a relatively common question, and there are many examples of such cases.

Here, "The case will determine whether federal regulators have exclusive government authority to press fair-lending and other types of complaints against national banks."

[Eric J in MN]

10. The more oversight of possible racial discrimination, the better.

It's preferable to have both the state and the feds having the authority to look into it.

[elleng]

12. I agree with the sentiment,

but that's the problem that the Court has tried to avoid, that is, the potential for conflicting laws and rules.

[Eric J in MN]

18. States and the federal government both the right to pass and enforce laws against

...racial discrimination.

Corporations should comply with both state and federal laws against racial discrimination.

[bread_and_roses]

14. Yes, that would seem to me to be the better solution, too, but....

I am no fan of "States Rights" and a few minutes thought is all it takes for the possible problems in leaving such regulation to the States to be evident. And I am not sure that some of the same problems would not arise if both Feds and State had the authority to regulate, in which case I would presume that the first line of enforcement would be the States, with the Feds as a back-up?

This is an area where I may be willing to give the Obama administration the benefit of the doubt, ie, that although following the same path as the illigetimate Junta, the motives and execution could be entirely different? (Although of course such a system does leave regulation to the mercies of political winds, which, having endured the last eight years we are all too familiar with...)

My post is full of question marks because I know about nothing about bank regulation and because it's late and I'm writing off the top of my head...however, it's rare enough that I give any Pol - even Obama - any benefit of doubt. But this may be one of the very, very, very rare cases, even though it is clouded by some of the other decisions made in the world of finance.

I'd have to do a lot more background reading (which I know I'm not going to have time for) to have a real firm opinion on this.

[No Elephants]

15. In many areas of significant federal involvement, both the states and the federal

government regulate.

Not sure which point you are making.

[shraby]

9. Seems to me that by taking it to the court, there

will be case law to guide disputes after a decision is handed down. The states and the feds will know where they stand for sure on it.

[Eric J in MN]

11. The Obama Administration isn't doing states a favor.

If the Obama Administration said that states can investigate racial discrimination at banks and ended the court case, then states could proceed with that.

[No Elephants]

16. That does not say anything about whether the Obamadmin took the correct side in this case. Any time

anything goes to court, there is a decision that becomes case law. And?

These were state regulations against bias and against screwing consumers. The reason for objecting is not clear at all.

And, often when federal pre-emption is necessary or desirable, that language would exist in the legislation. IMO, the Courts should not put it there after the fact. If Obama now wants it there, let him go to Congress. And that is exactly what I hope the Court rules, though I doubt it.

I've had more than enough of the unitary Exectuve and the anti-regulation Exectuve.

[aldo]

13. The banksters own Obama

It's that simple. He ALWAYS dances to their tune.

[ShortnFiery]

17. Along with the Generals and Contractors within The Pentagon. nt

[ProgressIn2008]

19. I'm shocked, shocked, I tell ya. nt