A Blast From The Past

From the Washington Post:

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.

***

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.

***

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

Elliot Spitzer, in between call girls.






41 replies
  1. 1
    qwerty42 says:

    less regulation!! what could possibly go wrong?

  2. 2
    David Hunt says:

    Elliot Spitzer, in between call girls.

    Awesome. Remarks about him “banging out” the article come to mind…

  3. 3
    Камрад Бросая камни says:

    In Socialist Amerika, database fixes you

  4. 4
    Comrade Jake says:

    Sully has PALIN BEAUTY CONTEST / SWIMSUIT VIDEO!!!

    Palin’s pretty good in it, because she doesn’t have to speak.

  5. 5
    tarrah begone says:

    It makes me ill when I read that. WTF was Spitzer thinking when he was screwing around? Jeez, what could have been…….

  6. 6

    Seriously, I’m not usually big on conspiracy theories, but wait….

    This was published in the Washington post on 2/14/2008. If I recall Spitzer testified on this subject to a congressional committee that day. He met the call girl that led to the scandal the evening of 2/13 (I remember thinking that the date went past midnight so he was with her on valentines day).

    Shortly after his testimony and this op ed , the FBI leaks information from Wiretaps that gets to the press. The rest is history.

    Spitzer was taken down.

  7. 7
    PC says:

    Sully has PALIN BEAUTY CONTEST / SWIMSUIT VIDEO

    The video got pulled faster than Spitzer’s pud in between bouts of trying to clean up the Wall Street cesspool.

  8. 8
    HyperIon says:

    how dare you (or spitzer) try to deflect the argument away from the evil minorities that REALLY caused this problem!

    (i saw a guy on a CSPAN callin about the problems in the financial sector recently and the first thing he led off with was “Don’t let anyone tell you this is about the Community Redevelopment Act”. but that’s what chuckles krauthammer claims today in WaPo.)

  9. 9
    scott says:

    This bugs me cuz it shows one reason why our modern political climate is so warped:

    Sex.

    Who gives a shit if Spitzer was stepping out on his wife? Oh yeah, I forgot, the puritan streak that still runs thru ‘Murkin society. Spitzer was doing good things, just like FDR or hell, Ike, and I use those two examples of presidents who had mistresses. I suppose the difference is h-o-o-k-e-r-s but still.

    Alas, that horse has long left the barn.

  10. 10
    comrade scott says:

    This bugs me cuz it shows one reason why our modern political climate is so warped:

    Sex.

    Who gives a shit if Spitzer was stepping out on his wife? Oh yeah, I forgot, the puritan streak that still runs thru ‘Murkin society. Spitzer was doing good things, just like FDR or hell, Ike, and I use those two examples of presidents who had mistresses. I suppose the difference is h-o-o-k-e-r-s but still.

    Alas, that horse has long left the barn.

  11. 11
    Scott H says:

    These “bankers” made fortunes off of fees and penalties from people they lured into debt they knew these people couldn’t pay (like 30% credit card rates). That’s worse than usury. Not that there is any justice here. Their shareholders got left holding the bag, and the US taxpayer is being set up to be the next sucker.

    I am still open to persuasion on this bailout, but nobody is coming out to persuade me.

    PS: Jack Cafferty for the win just now with Wolfe Blitzer. Sparring over Palin’s answers in the Couric interview, Jack snaps at Wolf, “Don’t make excuses for her! [Palin’s performance] is pathetic!”

    PPS: Please, make the replays of that Valley Girl parody stop!

  12. 12
    Dave S. says:

    If only Spitzer could have kept his socks on. Oh, wait…

  13. 13
    binzinerator says:

    Yeah, Spitzer is hinting he got Siegelmaned. Too bad he gave them the perfect excuse to go after him. He must have known the kind of hardball they played. He Clenised hisself. Another helpless zipperslave. And another ‘jeez what could have been’.

  14. 14
    Comrade FLILF Hunter says:

    My better half was an escrow officer until the housing market busted (in fact, she was laid off well on the bleeding edge of the disaster, so we could see this shitstorm on the horizon).

    She worked at a branch office in the middle of one of CA’s land-rush suburbs and saw this whole thing up close and personal.

    The branch manager was doing some really sketchy shit, and it became increasingly obvious she was in cahoots with some really crooked lenders. Flat out rip-off deals to folks of questionable citizenship with questionable paper. Loan structures that were guaranteed to balloon out of nowhere, brutal hidden fees. Pretty much everything in that WaPo snippet.

    My wife spent more time on the phone with the legal department in a month than she had in her entire career to that point. It was so bad, she told the regional manager to get her the hell out of that office.

    The bottom dropped out of the market about six or eight months after. And my wife hasn’t been employed since. Recently, she met up with a former co-worker who also got laid off and subsequently wound up in foreclosure.

    Polish the guillotines.

  15. 15

    Sex and taxes: How Spitzer allegedly got caught
    By Lindsay Beyerstein
    http://majikthise.typepad.com/.....xes-h.html

  16. 16
    ThatLeftTurnInABQ says:

    What was it again that Lincoln said, when people complained to him about Grant’s drinking? Something about sending some of the same hooch to his other generals…

  17. 17
    Dork says:

    Sully has PALIN BEAUTY CONTEST / SWIMSUIT VIDEO

    Nice can she has.

  18. 18

    Maybe when the FBI was investigating Wall Street this is where their investigation went–to Spitzer.

    Remember, all he really did was move his own money from one account to another to pay for a call girl. That and call out the Bush Administration on this mortgage scandal.

  19. 19
    Interrobang says:

    Holy crispy squid. This scam just gets deeper and deeper, doesn’t it?

  20. 20
    Камрад Бросая камни says:

    Send your bills to the US Treasury – Thanks Hank!

  21. 21

    Remember, all he really did was move his own money from one account to another to pay for a call girl. That and call out the Bush Administration on this mortgage scandal.

    Truthfully, he moved his father’s money :-)

  22. 22
    w vincentz says:

    According to today’s NY Daily News, Gui9-11iani is positioning his law firm to cash in on the Wall St mess.

    @Scotty,
    Since you mentioned “horse” and Spitzer, I hope you are aware of what he attempted to do to NYRA (NY Racing Authority). He made a lot of enemies in the NY thoroughbred
    industry.

  23. 23
    Comrade Napoleon says:

    The Republicans, they were for States Rights before they were against them.

  24. 24
    Ivan Ivanovich Renko says:

    Gyot-dammit.

    I’m so fucking sick and tired of the pecadilloes of progressive/Democratic politicians being turned into destructive scandals while Republicans can fucking stuff themselves into wetsuits with dildoes in their fat fucking asses without so much as a goddamn whisper about their shenannigans.

    DAMMIT.

    I HATE me some fuckin’ Republicans.

  25. 25
    Laura W says:

    Will there be a debate drinking game thread, John?
    My word is “pocketbook”.
    We better not include “Main Street” or we’ll all suffer alcohol poisoning by 9:10EST.

  26. 26

    Remember, all he really did was move his own money from one account to another to pay for a call girl. That and call out the Bush Administration on this mortgage scandal.

    Oh yeah, he completely pissed off all the republicans in New York State by going after them with his own alleged Nixon-like tactics and having state troopers monitor his political opponents – http://www.nydailynews.com/new.....s_bad.html

    He wasn’t making friends and influencing people in Albany. He was taking no prisoners.

  27. 27
  28. 28
    JL says:

    Laura W, Another phrase that I would ban is “My friends”. Most of us would be passed out before the end of the debate.

  29. 29
    El Cid says:

    I am outraged to learn from my conservative friends that the government let blacks and minorities steal $700 billion worth of housing over the last 5 years. You’d think someone might have noticed. And where did they put them all?

  30. 30
    Funkhauser says:

    Gosh, it’s reassuring that we no longer have people like that in our public life….

    “My wallet? Why of course you can have it! My Social Security and Medicare? Take that too. No! No! Best regards, Mr. Goldman, Mr. Sachs.”

  31. 31
    Comrade Napoleon says:

    Did anyone see over at Mother Jones they have debate bingo cards.

  32. 32
    Keith says:

    That’s some sweet federalism, there, W!

  33. 33
    SamFromUtah says:

    …Republicans can fucking stuff themselves into wetsuits with dildoes in their fat fucking asses without so much as a goddamn whisper about their shenannigans.

    That guy was not a politician and he was, well, dead.

    But I take your point. Diapers Vitter comes to mind, much as I hate it when that happens.

  34. 34
    Comrade Nixon Hailfire Palin says:

    That’s some sweet federalism, there, W!

    If you don’t show those states who’s boss, they’ll end up letting dying people use marijuana.

  35. 35
    w vincentz says:

    How come the only time Refuckagains want to be “bipartisan” is when they find themselves up to their eyeballs in the shit they created?

    Oh..and Laura, if POW comes up, I’m doing five shots of voldka. Didjaknow that McIdiot (war hero) killed 134 of his shipmates on the flight deck of the Forrester when he hot-fired his engines and it rattled his aircraft to the extent that the zulu missiles fired? War hero indeed. They reassigned him to the Nimitz so his remaining shipmates didn’t kill him. POW, POW! (songbird)

  36. 36
    burnspbesq says:

    Yet another example of Republican hypocrisy.

    They love them some Federalism when they want to get Federal regulators off the backs of their contributors.

    Conversely, they are all about federal preemption on those rare occasions when the states try to protect their citizens against the predations of the Republican base.

    The most important case on the Supreme Court’s docket in the term that begins a week from Monday addresses the previously unthinkable notion that FDA regulation of drugs and medical devices pre-empts state tort laws that allow people injured by defective drugs and medical devices to sue the manufacturers.

  37. 37
    barkleyg says:

    You guys have it all wrong. This whole mess is the minorities fault. On the “other side” this is THE THEME of the WEEK!

    I almost threw up my dinner while reading this opinion from OC Register on September 21, 2008. It had to be submitted by last friday,9/17/08 This is a cordinated Repug smear. It makes John Birch look like a ….

    4th paragraph: 37 m ACORN blackmails mortgage industry. Give me a fuckin break!!

    Look up ocregister… search acorn, and voila for authentification of this letter.

    How far does Obama fall from the Acorn tree?

    Barack Obama credits much of his understanding of the plight of poor people with his community organizer service, which he lists as one of his major accomplishments.

    Between 1999 and 2002, Obama served on the Board of the Chicago-based Woods foundation with radical Weatherman bomber William Ayers. Together, they pumped millions in grants into organizations such as the Association of Community Organizations for Reform Now. Acorn, with a $37 million annual budget, is involved in voter registration, fighting housing discrimination, and several other “grass roots” endeavors.

    In voter registration drives, Acorn has added hundreds of thousands of minority voters to the Democratic Party rolls. However, Acorn has been indicted and workers convicted of voter fraud by also registering dead voters and fictitious non-existent people.

    In the housing area, Acorn demonized banks and mortgage lenders for alleged “redlining” of minority neighborhoods and for denying loans to “underprivileged” borrowers. Many banks and lenders caved under Acorn threats to sue and granted “no stated income” loans, no down payment interest-only loans, and adjustable rate home loans to unqualified borrowers. The net result was the subprime meltdown and massive foreclosures when borrowers with no equity in their homes just walked away. Is this the kind of “community service” Obama is proud of?

    –John Perry of San Juan Capistrano

  38. 38
    w vincentz says:

    OT The Palin – Karzai interview:
    http://newsforreal.com/

  39. 39
    patroclus says:

    Well, the OCC isn’t “obscure” at all – for nearly 150 years, it has been (and remains) the principal regulator of national banks. Its goals generally include growth, stabilization, safety and soundness, an efficient allocation of resources and an equitable distribution of wealth and income. Generally speaking, because the Fed is mostly concerend with safety and soundness (at least in its supervisory and regulatory role) and the FDIC is mostly concerned with depositor protection, the OCC has been more interested in promoting growth, but as they are all members of the FFIEC (Federal Financial Institutions Examination Council), they all share the same goals.

    Historically, turf fights and forum shopping have been common. If an institution doesn’t get the answer it wants from one of its regulators, it goes to another for approval. But in BushWorld, where normal constitutional and regulatory standards were suspended and the goals instead became stunningly corrupt institutionalized cronyistic gaming of the system for personal pecuniary unjust enrichment purposes, the pre-emption of states’ attorneys generals’ interest in consumer protection from predatory lenders strikes me as one of the all-time historical scams eclipsing Teapot Dome, Credit Mobilier and Charles Keating all rolled into one.

    Spitzer was spot on – it is no wonder that the lying sliming Republicans targeted him as they did. This is the mother of all pathetic and despicable BushWorld actions – to the tune of $700 billion.

  40. 40
    PC says:

    We better not include “Main Street” or we’ll all suffer alcohol poisoning by 9:10EST.

    +3. Need to stretch the liver before the main event.

  41. 41
    The Dangerman says:

    Didjaknow that McIdiot (war hero) killed 134 of his shipmates on the flight deck of the Forrester when he hot-fired his engines and it rattled his aircraft to the extent that the zulu missiles fired?

    Actually, that is Forrestal and, yes, there are some odd facts about the entire event. It always helps to be an Admirals kid.

    Also, I prefer my guillotines rusty.

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