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Last updated on April 24, 2014 at 17:35 EDT

Spitzer appeals blocking of mortgage probe

March 29, 2006

NEW YORK (Reuters) – New York Attorney General Eliot
Spitzer has asked a federal appeals court to overturn an
October ruling that blocked him from investigating whether big
banks are discriminating against minorities seeking mortgages.

The appeal, filed with the U.S. Second Circuit Court of
Appeals in New York on Monday, challenges the claim by the
Office of the Comptroller of the Currency (OCC) that state
regulators have no jurisdiction over national banks.

Spitzer also appealed a related lawsuit by The Clearing
House Association, an association comprised of big U.S. banks.

In October, U.S. District Court Judge Sidney Stein sided
with the banks and the OCC, ruling that a questionnaire sent to
banks by Spitzer was prohibited under the National Bank Act. He
also enjoined the attorney general from starting any legal
action against federally chartered banks.

“A long line of judicial precedent,” Spitzer argued in his
appeal, “confirms the National Bank Act does not bar states
from bringing lawsuits against national banks to enforce
generally applicable laws.”

Stripping the states of enforcement power “upsets the usual
constitutional balance of federal and state powers,” he argued.
“Denying the states authority to enforce their own laws against
national banks would end an eighty-year practice that courts
have repeatedly sanctioned.”

Officials from the OCC were not immediately available. The
OCC and Clearing House have until May to file their responses
with the appellate court.

Spitzer’s clash with the OCC began last April when he asked
banks to provide credit scores for minority borrowers and how
the banks determined mortgage rates.

Banks and the OCC argued that banks should be subject to a
single set of laws and regulations, saying working with many
regulators would increase the banks’ business costs and boost
borrowing costs for consumers.

Spitzer has criticized the OCC for not doing enough to
protect consumers. Several advocacy groups, including the
National Association for the Advancement of Colored People,
backed Spitzer’s suit.


Source: reuters