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Just when you thought we had enough, the ghost of Eliot Spitzer reappears.
No, this time there is no call girl involved, just a lawsuit that Mr. Spitzer brought before the courts back in 2005. The case, Cuomo v. Clearing House Association and the Office of the Comptroller of the Currency (OCC), is an attempt by Mr. Spitzer, state Attorney General of New York at the time, to seize mortgage data from federally chartered banks. In doing so the state would be able to poke and pry for evidence of discrimination under state fair lending laws. The very same laws, as championed by the infamous GSE's (Fannie Mae and Freddie Mac), that have brought our economy to its knees.
Apparently Justice Scalia didn't get the memo. Either that or its still hunting season on capitalism? (On second thought, when is it not?)
In a rather perplexing decision yesterday, the Supreme Court's liberal four, improbably led by Justice Scalia, has now uncharacteristically gone against the National Bank Act. The NBA was instituted under the Lincoln Administration in 1864 and has been rightfully upheld by state, federal and, yes, even the Supreme Court--as recently as 2007.
Justice Scalia's opinion recognized the NBA, but went on to differentiate between "visitorial" and "prosecutorial" powers that states may have over banks. Under the High Court's decision, state AGs may "prosecute" those banks for any breach of state law. This includes mortgage lending regulation.
You can now add 50 state AGs to the list of mounting regulation that banks must now worry about.