Sunday, May 10, 2009
The OCC and the Banks
"On Tuesday, the US Supreme Court will hear New York's appeal. If the state wins, it would make a break with decades of precedent that mostly favors the powers of the federal government and open a new era for 50 state regulators to play a bigger roles. Under both Democratic and Republican administrations, the Treasury regulator, the Office of the Comptroller of the Currency [OCC], has allied with banks it supervises to set aside state laws ranging from disclosure requirements on loans to limits on surcharges at automated teller machines. ... The Supreme Court almost always has agreed. Just two years ago, the justices blocked states from supervising state-chartered mortgage subsidiaries owned by national banks. ... The financial crisis many blame on a mortgage industry rife with abuse could undercut the argument that the National Bank Act was intended to shield national banks from state law-enforcement measures. ... The [OCC] and the banks it oversees assert that even when state laws do apply to national banks, the comptroller alone--and not state authorities--holds power to enforce them. ... 'Exclusivity of supervisory authority is critical,' the former comptrollers argued, so that 'consumers are offered maximum protection against unfair treatment in their access to and enjoyment of the products and services of national banks.' ... If the court finds for the comptroller's office, some federal lawmakers say they will act to nullify the ruling", my emphasis, Jess Bravin at the WSJ, 27 April 2009.
The OCC has protected large banks for decades. Its idea of consumer protection is my idea of Newspeak. The OCC is terrified state regulators may expose its perfidy. Obama seems to be following Bush and is siding with the banks. Think about this, "the National Bank Act was intended to shield national banks from state law-enforcement measures". Really?