Banker Update: NY AG Spitzer Blasts OCC Preemption Proposal
Joining the chorus of those opposing the OCC proposal, New York Attorney General Eliot Spitzer called the OCC's effort to generally preempt state laws that apply to the terms of loans made by national banks "misguided and wrongheaded." Objecting that the OCC action would prevent states from protecting consumers from predatory lenders, Spitzer was joined at a press conference by members of Congress and consumer activists to call upon OCC to withdraw the proposal. Rep. Carolyn Maloney (D-NY), a member of the House Financial Services Committee, said, "It is totally inappropriate for a heavy-handed federal agency to overrule the hard won consumer lending protections of the fifty states."
Comptroller of the Currency Jerry Hawke said OCC is just responding to aggressive states trying to regulate national banks. "Mr. Spitzer wants the authority to come romping into national banks without regard to a federal statute that says he can't and without regard to the fact that we have exclusive authority over national banks," American Banker reported Hawke said. The OCC also argues it has the authority and capability to protect consumers against predatory lenders. Last week OCC chief counsel Julie Williams suggested that "instead of dissipating energy and resources, there is a way that states could be combining efforts with the OCC and leveraging resources to combat abusive financial providers." Stay tuned.