February 14, 2008: Eliot Spitzer Accuses Bush Administration of Protecting Predatory Lenders

The Washington Post publishes an editorial by New York Governor Eliot Spitzer, accusing the Bush administration of protecting predatory lenders from state officials through use of the federal Office of the Comptroller of the Currency (OCC). Spitzer notes that since the OCC’s founding in the 1860s, its function was to monitor the records of national banks and ensure they were balanced. Yet as the current crisis in predatory lending became acute, the OCC used a clause from the 1863 National Bank Act to make all state predatory lending laws inert. In addition, Spitzer asserts that the OCC created new rules making it impossible for state officials to employ their own consumer protection laws against national banks. Spitzer continues to note that when he opened an investigation of the mortgage lending practices of several banks, the OCC brought a federal lawsuit to prevent the inquiry from moving forward. “When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners,” Spitzer concludes, “the Bush administration… will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits.” [Washington Post, 2/14/2008]