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March 14, 2008 at 19:58:13
Spitzer on Bush's role in the Subprime Crisis by Eliot Spitzer (Posted by Josh Mitteldorf) Page 1 of 1 page(s) |
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By Eliot Spitzer 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. Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices. What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no. 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. Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position. 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. The writer is governor of New York.
How the Bush Administration Stopped the States From Stepping In to Help Consumers
Thursday, February 14, 2008; A25
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Buying a house....
The people who were "duped" into taking a loan (without bothering to read the terms of the loan,) were college graduates! I find it fascinating to read articles like this one, because it leaves out many different side factors. For example, Parked in the driveway is a car that is leased, inside there is a 60" plasma screen TV, the kids are all wearing $100 sneakers, the fifth and sixth mastercards were maxed out, and we blame the "predatory lending practices of the banks" In the MEAN TIME, we should put safeguards in place that will keep things like this from happening again... Like, for example, the ability to throw politicians in JAIL for doing things like this in exchange for a sizable campaign donation! Ciao, CZ by steve scheetz (4 articles, 0 quicklinks, 3 diaries, 829 comments [52 recommended, 0 rejected]) on Saturday, Mar 15, 2008 at 8:00:03 AM  (0+)
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Reply: Investment banker bailout??
And the same arguments don't apply to the investment bankers who just snap their fingers and receive hundreds of billions of dollars in non-recourse bailouts from Ben Bernanke - I mean the rank and file taxpayers?? They didn't really understand that leverage works in down markets too? "The people who were "duped" into taking a loan (without bothering to read the terms of the loan,) were college graduates! I find it fascinating to read articles like this one, because it leaves out many different side factors. For example, Parked in the driveway is a car that is leased, inside there is a 60" plasma screen TV, the kids are all wearing $100 sneakers, the fifth and sixth mastercards were maxed out, and we blame the "predatory lending practices of the banks"" by Hal the Avenger (0 articles, 0 quicklinks, 0 diaries, 1 comments) on Sunday, Mar 16, 2008 at 5:54:48 AM (0+)
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Eliot Spitzer, a Bit like Charles Parnell
The great Irish Independence Movement leader, Charles Stewart Parnell, was done in by a scandal involving a married woman, Katherine O'Shea, even though she had already left her husband. By today's standards, I doubt it could even reach the level of scandal. But at the time, it was enough for Parnell's political enemies to eventually destroy Parnell and set back Irish nationalism against the British. Spitzer, we cannot emphasize enough, led a movement perhaps not on the level of Parnell's, but still important to the freedom and independence of us all, a movement to demand accountability and honesty on Wall Street, where unbridled power and corruption continue to fuel Plutocracy and the excesses of a capitalist system that will ultimately impoverish America if left unchecked. In fact we are seeing this culture of greed imploding upon us now, and who knows where it will end. Like Parnell, Spitzer's enemies seized upon the allure of sexual impropriety to destroy his position, politically. But it will be utter folly to let his battle, which is our battle, be destroyed too. Others must take up the torch, and, indeed, it is not impossible for Spitzer to return to the fray either, if he goes through the proper rituals of atonement and purification. Do not give up, Eliot, if you want to continue to protect this country from the predators of Wall Street. by Mac McKinney (53 articles, 114 quicklinks, 241 diaries, 1414 comments [31 recommended, 0 rejected]) on Saturday, Mar 15, 2008 at 10:11:26 AM (0+)
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More Qestions about Spitzer Episode
There are no charges present or pending against former Governor Spitzer. Why was Eliot's name the only Emperor Club client name released, so far? The Bush DOJ official in charge of this operation was Acting Deputy Attorney General Craig S. Morford. Morford is the same official whose prosecutorial misconduct silenced Congressman Jim Traficant and also figures in the resignation of Jim Vines as U.S. Attorney in Tennessee? The White House is still stonewalling the U.S. Attorney's firing inquiry? So now Eliot is silenced? And the Bush administration and its friends continue to loot the country while Congress fiddles and my Congressman, Tim Ryan, worries about his Food Stamp diet plan? When will Congress tear the lid off this Republican/neo-con cesspool? by Dolores Rohner (0 articles, 0 quicklinks, 0 diaries, 5 comments) on Saturday, Mar 15, 2008 at 10:45:04 AM (0+)
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Follow the money
It all comes down to plain old greed. We now see Carlyle Capital defaulting on $16 - 20 BILLION in mortgage-backed securities, after profiting handsomely on the upside run. There are no coincidences here. What does it take to put these guys in jail? by Papá Kokopelli (0 articles, 0 quicklinks, 2 diaries, 19 comments [1 recommended, 0 rejected]) on Saturday, Mar 15, 2008 at 10:56:47 AM (0+)
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Reply: Greg Palast on Spitzer and Predatory Banks
http://www.opednews.com/articles/genera_greg_pal_080314_the__24200_billion_bai.htm by Rady Ananda (182 articles, 374 quicklinks, 49 diaries, 1718 comments [201 recommended, 2 rejected]) on Saturday, Mar 15, 2008 at 5:41:10 PM (0+)
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Predatory lending practices
In 2003, I financed a home. I contacted several lenders, and since I had a less than perfect credit rating, ended up with Ameriquest. I was happy to just get a loan. Here is what happened: I talked to a loan officer regarding the terms of my loan. I explicitly indicated that I wanted a fixed rate loan. The current interest rate was around 5% for an adjustable rate loan. The interest rate for a fixed rate loan was 8.75%. A big difference. Having lived through the interest rate hike in 1980, I was not tempted. I insisted on the fixed rate. The loan officer said okay. When I got the paperwork to sign, it was for the adjustable rate loan. I refused to sign it. I spoke to the loan officer again, and he tried to convince me to take the adjustable rate loan, with the assurance that I could refinance in a couple of years. I refused. The next set of papers I got were correct. They tried to shift me to the adjustable rate loan up until the day escrow closed, and if I had not been vigilant, they would have succeeded. This is predatory lending with a capital P. by Barbara Peterson (73 articles, 109 quicklinks, 11 diaries, 541 comments [98 recommended, 0 rejected]) on Saturday, Mar 15, 2008 at 11:48:35 AM (0+)
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Reply: Exactly
When foolish commenters blame borrowers for the ills of the financial system, it is examples like yours that set them straight. A person must go against the will of the lender, government propaganda, the educational system, the media, etc, just to be responsible and do the right thing money-wise. The ATM/Credit Card is another bank scam. Whenever my pure ATM card comes up for renewal, the bank always sends me a new "ATM/Credit Card", with a MasterCard or VISA logo. Every time, I go into the bank and insist on a pure ATM Card. At first they say they can't, then when I insist, they admit they can still issue a pure ATM card. The banks try to force the pure ATM Cards out of the system by twisting merchants' arms as well. Many merchants will not accept my pure ATM Card due to bank pressure. Yet, a pure ATM Card is a great way to keep spending within bounds and not get overextended on credit. I hope you found the time to refinance your fixed rate loan over the past 5 years. Mine is at 5.5% fixed due to a timely refinancing (no cash out). by Paul Rye (7 articles, 2 quicklinks, 22 diaries, 500 comments [44 recommended, 1 rejected]) on Saturday, Mar 15, 2008 at 3:50:37 PM (0+)
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Reply: BRAVO!
And congratulations on being one of the few people who saw past the smoke screen! If more people were like you, then we would not be having the issues we are currently having now! Ciao, CZ by steve scheetz (4 articles, 0 quicklinks, 3 diaries, 829 comments [52 recommended, 0 rejected]) on Sunday, Mar 16, 2008 at 9:07:41 PM (0+)
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Sptizer muzled?
I am not sure what can prevent Spitzer from speaking out now and denouncing what Geg Pallsst (see his piece on OPed news same edition) is talking about. He was set up; other politicians involved in sexual encounters (outside of marriage) are not paying any price . SO he can make the case that He was singled out and WHY> Democrats in Congress are caught in this blackmail, I think.. by crispy (0 articles, 0 quicklinks, 0 diaries, 43 comments [13 recommended, 0 rejected]) on Sunday, Mar 16, 2008 at 10:15:34 PM (0+)
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Reply: Of course he can!
This is SUCH a non-issue that it is absurd.... Thank you for asking the question! Ciao, CZ by steve scheetz (4 articles, 0 quicklinks, 3 diaries, 829 comments [52 recommended, 0 rejected]) on Monday, Mar 17, 2008 at 3:08:03 PM (0+)
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