WaPo/Business Week - Bush Admin to Blame For Blocking State Efforts To Regulate Subprime Lenders

[Median Democrat]

In February 2008, before Eliott Spitzer was outed by Federal authorities for his extracurricular activities with a call girl, Spitzer wrote the following Op-Ed regarding the causes of the subprime crisis:

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

/snip

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.

/snip

Of course, shortly thereafter, Spitzer was disgraced in a call girl scandal in March of this year. This theme pushed by Spitzer was recently picked up again by Business Week of all publications in an article published today:

http://www.msnbc.msn.com/id/27121535/

/snip

States warned about impending mortgage crisis: Bush administration, financial industry thwarted efforts to curb greed

* * *
A number of factors contributed to the mortgage disaster and credit crunch. Interest rate cuts and unprecedented foreign capital infusions fueled thoughtless lending on Main Street and arrogant gambling on Wall Street. The trading of esoteric derivatives amplified risks it was supposed to mute.

One cause, though, has been largely overlooked: the stifling of prescient state enforcers and legislators who tried to contain the greed and foolishness. They were thwarted in many cases by Washington officials hostile to regulation and a financial industry adept at exploiting this ideology.

The Bush Administration and many banks clung to what is known as "preemption." It is a legal doctrine that can be invoked in court and at the rulemaking table to assert that, when federal and state authority over business conflict, the feds prevail — even if it means little or no regulation.

/snip

[BrklynLiberal]

1. Now it is easier to understand why Spitzer was outed the way he was

Not excusing what he did....but it was handled by the MSM and the prosecutors like he had committed a series of murders.
The repukes wanted to make sure he could not wield any power against them..

[gopbuster]

2. The truth always comes out.......a sunray peeps through the clouds.

[elleng]

3. Right. Any questions

about how far they'll go to keep Dems out of WH + congress?

[BrklynLiberal]

4. That is why I do not want to pop any champagne corks until after the election

results are in....and I am even a bit nervous about what the repukes might do between the election and Jan 20th.

[elleng]

5. I'm with you, Brklyn;

NEVER RELAX, thats us, eh?

[WhiteTara]

6. I am absolutely there

I won't feel safe until they have been tried, convicted and incarcerated, But to see Barack in the White House, that would make me feel somewhat better.