Obama Sides With Banks Accused of Racism

[Orwellian_Ghost]

Obama Sides With Banks Accused of Racism

The administration defends lenders that allegedly bilked minority customers. What gives?

by Stephanie Mencimer

A number of big national banks stand accused of systematically bilking black and Latino borrowers. And the administration of our first black president is siding with the banks.

At the end of April, the Obama administration will go before the US Supreme Court to argue that those banks-including bailout recipients Bank of America, Citi, Wells Fargo, and JPMorgan Chase-should be allowed to duck a state investigation into their lending practices. If that sounds like the politics of the past, it is. The Obama administration has opted to maintain the stance of the Bush administration-one opposed by the NAACP and other major civil rights groups. And it won't be some Bush holdover making the arguments in Cuomo v. The Clearing House Association (an industry group whose membership includes the world's largest banks). Instead, the banks will be defended by the office of Obama's new solicitor general, former Harvard Law School dean Elena Kagan, whom some conservatives have branded a "radical leftist" because of her record opposing military recruitment on college campuses.

The case got its start in 2005, when then-New York attorney general Eliot Spitzer discovered that many banks operating in his state were issuing a disproportionate number of high-interest loans to African Americans and Hispanics. Invoking state anti-discrimination laws, Spitzer wrote to those banks, politely asking for more information about their lending practices. He didn't even issue a subpoena. Rather than respond to the request, the banks sued Spitzer. They argued that they were legally entitled to blow him off because federal banking law preempted the state investigation-that is, only the feds could make such a request, not some lowly state AG.

To make their case, the banks sought help from the Bush administration, through the Office of the Comptroller of the Currency. The OCC is a little-known federal bank regulator that over the past decade has become increasingly active in helping those banks and their subsidiaries squash state efforts to rein in abusive predatory lending practices. The OCC joined the banks in the case as a plaintiff, asserting that a Civil War-era banking law made the OCC the only sheriff in town. When it came to big national banks like Bank of America and Wells Fargo, only the OCC, it argued, could force the banks to comply with state consumer protection laws like those banning racial discrimination in lending.

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http://www.commondreams.org/headline/2009/04/07-11

[terisan]

1. State Rights may again become a Battle Cry-this time more to my liking.

In the 60s and 70s it was often an excuse to deny civil rights but now it may be a civil rights call against an offressive federal government that is is hock to bankster-fraudsters.