Predatory Lenders' Partner in Crime

[ErikJ]

The Cons keep blaming the Bush Deprerssion on the liberal's Community Reinvestment Act of 1977 they say forced the banks to give minorites mortgages, which is an absurd lie.

Here is what I believe is the core of the 2008 crisis, the deregulation of the mortgage lender's industry by Bush et al.
Spitzer's op-ed in 2008 explains.

Predatory Lenders' Partner in Crime
By Eliot Spitzer
Thursday, February 14, 2008
Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

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Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html

[BlueToTheBone]

1. Which is why Spitzer had to be neutralized.

[Myrina]

2. Exactly

They couldn't really "eliminate" him, so they did the next best thing.

[midnight]

3. The article that turned all surveillance and wire tapping on to former Gov. Spitzer and silenced him

from using his authority to do anything about it... And still the Govt. looks the other way and allows the growing of the homes on main street to go unprotected...

[ErikJ]

4. Right, one month later.

His expose came out Feb. 14th and he resigned March 17th, 2008.

From Wikipedia: He served as the 54th Governor of New York from January 2007 until his resignation on March 17, 2008 from the exposure of his involvement as a regular client of the escort agency, Emperors Club VIP. Prior to being elected governor, Spitzer had served as New York State Attorney General.