Statement By Attorney General Eliot Spitzer Regarding The Investigation Of Racial Disparities In Mortgage Lending

My office has asked a number of leading banks to disclose information regarding the interest rates charged on home mortgage loans. At issue is whether minorities are being charged higher rates. Evidence already disclosed by the banks appears to show a significant racial disparity that could violate state civil rights laws, which my office is responsible for enforcing.

Yesterday, a coalition of banks and their federal regulator sued my office seeking to block our review of these lending records. While such a move was expected from the banks, it is shameful that a federal regulator would join in an effort to shield the banks from scrutiny by state regulators.

The federal regulator – Office of the Comptroller of Currency – suggested that a review of these records by my office would somehow interfere with federal supervision of the banks. But this position defies common sense and a century of joint state and federal oversight of the banking industry.

This position, coming as it does after the OCC effort last year to shield nationally-chartered banks from enforcement of state consumer protection laws, is another indication that the Bush administration sides with corporate interests over consumer interests.

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.

Indeed, the OCC’s efforts to protect banks has been opposed by all fifty state attorneys general and all fifty state banking superintendents. Numerous consumer groups also have voiced their strong opposition, as has the NAACP and the American Association of Retired Persons. These state regulators and consumer advocates have pointed out that the OCC’s new interpretation of the National Bank Act is inconsistent with existing law and constitutes bad public policy. Members of Congress also have voiced their opposition to the OCC’s rules.

New York State Banking Superintendent Diana Taylor stated in testimony to Congress: "The OCC’s new regulations usurp the powers of the Congress, stifle state efforts to protect their citizens, and threaten not only the dual banking system but also public confidence in our financial services industry."

Furthermore, when my office spoke to the OCC last month, the OCC strongly indicated that it would continue its efforts to preempt the states from bringing consumer protection and anti-discrimination cases against national banks. For the OCC, it seems, "collaboration" means the states stand down and let the banks enjoy the cozy embrace of their would-be national regulator.

My office is committed to enforcing laws that protect the citizens of the State of New York from racial discrimination in lending, and will strongly resist attempts to limit our long-standing authority to do so.