Lobbyists Push Back Against AG 'Power Grab'

[Dover]

Lobbyists Push Back Against AG 'Power Grab'
March 4, 2009

By Stacy Kaper, American Banker

WASHINGTON—Industry lobbyists are trying to strip a provision from an appropriations bill that could give the Federal Trade Commission and state attorneys general sweeping new powers over banks.

While they were focusing on a separate bill that would let bankruptcy judges restructure mortgages, lobbyists largely missed the provision, which was included in the appropriations bill the House passed last week.

As the Senate prepares to vote on the bill this week, lobbyists are trying to kill the provision, calling it a power play by state attorneys general.

"We see this as part of a wave of proposals that the state attorneys general are looking to put into any legislation being considered by Congress where they're given the ability to go into or enforce laws against national banks," said Marcia Sullivan, the head lobbyist of the Consumer Bankers Association. "They don't have the expertise that the bank regulators have, and it could really have the effect of just changing our entire regulatory system."

The provision would let the FTC write new mortgage lending rules defining unfair or deceptive acts or practices. The measure also says state attorneys general could enforce these new mortgage lending rules as well as any violation of the Truth-in-Lending Act.

Exactly what impact the provision would have is up for debate, including whether it even applies to depository institutions. The measure's sponsors argue banks are not meant to be targets of the provision, but industry lawyers said its wording would allow state attorneys general to bring a suit against a national bank...cont'd

http://www.iddmagazine.com/news/190760-1.html?type=printer_friendly

[marketcrazy1]

1. if the bank lobby does not want this provision in the bill

then it will be removed, count on it. it has never been about what is best for the country or the consumer. it is all about the banks.

[Dover]

2. I believe it already passed last Friday. (This article was written on Mar. 4)

I'm looking for something more recent to find out what happened with this portion of the bill.

[Dover]

4. Looks like that provision passed House - Lawmakers told banks "just ignore it..we'll fix it later".

Just Ignore It

Lawmakers sent a novel message last week to nervous banking industry representatives raising concerns about a provision in an appropriations bill that would give state attorneys general the right to examine national banks: Just ignore it, we'll fix it later.

Banking lawyers have said the provision is vaguely worded and would let the Federal Trade Commission write mortgage lending rules that would apply to banks and could be enforced by state attorneys general.

Though the measure's sponsor, Sen. Byron Dorgan, D-N.D., insists it is aimed only at nonbanks, the industry worked overtime trying to scuttle the provision. Fearful of holding up the budget, however, lawmakers put off making any changes in the provision. Instead, they offered a promise that the measure does not apply to banks.

Sen. Mike Crapo, R-Idaho, withdrew an amendment to remove the language after Senate Banking Committee Chairman Chris Dodd and Dorgan promised him the measure did not say what he and others think it says. And just to make sure, they promised they will fix it later.

"It is my understanding we have an agreement … that will establish that we do not want to change the regulatory authority and the jurisdictional structures we now have for our federal regulators over our depository institutions," said Crapo, "and that we will, in a very expedited manner in the next available option for a legislative vehicle, make statutory changes to correct that."

Dodd said he would get right on it.

"Our intent is, at the earliest possible time, we will have legislation to correct what is in this bill and change that," he said.

http://www.americanbanker.com/printthis.html?id=20090306H5TWXKJX

----
WASHINGTON — The House approved legislation 234 to 191 on Thursday that would let bankruptcy judges modify mortgages, but the bill's fate in the Senate remains unclear.

Though House leadership had enough of a majority to pass the bill over opposition from Republicans and several conservative Democrats, Senate leaders do not have as much leeway.

Some Senate Democrats, including Sen. Evan Bayh of Indiana, continue to push for ways to narrow the bill, encouraged by the banking industry, which says the legislation would drive up the cost of credit.

"Further compromise is coming in the Senate," said Brian Gardner, an analyst with KBW Inc.'s Keefe, Bruyette & Woods Inc. "The Republican leadership will be able to keep their caucus unified, and that means Democrats can't afford to lose any of their members. And there could be a small number — and that's all you need — to force a compromise."

Senate Majority Whip Richard Durbin said last week that he was open to a compromise, but one has yet to emerge.

..cont'd

http://www.americanbanker.com/printthis.html?id=200903052DOLX3BS

[Dover]

3. This is probably why Spitzer got nailed.....he was fighting to regulate the banks and the Bush/Fed

were protecting the banks!



This battle between banks and regulators has been going on for some time. Here are some older
Bush era battles:

Spitzer Charges Feds Conspiring to Shield Banks Against State Consumer Protection Laws
June 17, 2005

New York Attorney General Eliot Spitzer says a lawsuit filed against him by the federal Office of the Comptroller of the Currency (OCC) is a "shameful ... effort to shield the banks from scrutiny by state regulators." Spitzer has been investigating whether there are racial disparities in lending practices.

In a blistering response to the OCC's suit, Spitzer said the agency is working with banks to preempt the states from bringing consumer protection and anti-discrimination cases against national banks.

"It's unconscionable that the OCC would help the banks it regulates draft litigation to shield them from reasoned enforcement of consumer protection and civil rights laws and then sit at Counsel table right next to those banks, as happened in court this morning," Spitzer said...cont'd
http://www.consumeraffairs.com/news04/2005/occ_spitzer2.html


((This is probably why they nailed Spitzer.))

===


Mortgage system crumbled while regulators jousted

Saturday, October 11, 2008

Federal bank regulators fought over turf with state agencies while America's mortgage lending system grew increasingly unstable and then fell apart.

When state investigators spotted questionable loan practices, the feds rejected their help and informed the state that it had no business looking into the affairs of federally chartered institutions. Scott Jarvis, director of the Washington state Department of Financial Institutions, said his files are full of letters from federal bank regulators, bankers and other lenders politely telling his office to take a hike...cont'd

http://seattlepi.nwsource.com/business/382860_mortgagecrisis11.html

[crimsonblue]

5. Spitzer was corrupt.

He was involved in keeping naked short sales of stocks under wraps and also many of his investigations into "fraudulent" companies is suspect. I recommend you read the essay at deepcapture.com

[nashville_brook]

6. lets remember who is taking power back here -- it's The People. ergo, not a "power grab"