- The Washington Times - Thursday, June 16, 2005

From combined dispatches

NEW YORK — The U.S. Office of the Comptroller of the Currency and an association of leading commercial banks separately sued New York Attorney General Eliot Spitzer yesterday, saying he is exceeding his authority.

The lawsuit by the Office of the Comptroller of the Currency, filed in U.S. District Court for the Southern District of New York, seeks an injunction preventing Mr. Spitzer from obtaining lending data from JPMorgan Chase & Co., HSBC Bank USA and Wells Fargo Bank, which the federal agency regulates. The banks also filed in U.S. District Court.

Mr. Spitzer’s inquiry into mortgage lending began in April, on the heels of similar investigations into practices in the insurance, mutual fund, and securities industries.

Acting Comptroller Julie Williams said Mr. Spitzer had rebuffed efforts to collaborate.

“While the New York Attorney General’s Office has legitimate authority for a great number of lending institutions operating in the state, federal law provides that lending activities of national banks and their subsidiaries are under the jurisdiction of the OCC,” she said.

In January the agency issued a ruling asserting that it is the primary regulator of national banks, such as Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Wachovia Corp. The OCC said then state agencies with concerns about predatory lending or other illegal behavior should bring them to the federal level instead of attempting to handle the investigations themselves.

The Clearing House Association, of Manhattan, said it was taking its legal action as part of its role of protecting the rights of its 11 members, eight of which are federally chartered national banks already subject to federal regulation.

Mr. Spitzer has been questioning some of the nation’s biggest banks in a probe of potential discriminatory practices in setting mortgage rates and fees.

The lawsuit said the banks were told in letters dated April 19 and April 20 from Mr. Spitzer’s office that it had begun a preliminary inquiry into lending practices to find potential violations of federal and state anti-discrimination laws.

The lawsuit said the banks are already subject to monitoring by the OCC and that Mr. Spitzer is threatening to increase the compliance burden they face in a manner prohibited by federal law.

Spitzer spokeswoman Juanita Scarlett said she could not comment on the banks’ lawsuit. But she said Mr. Spitzer’s office has “a long history of protecting consumers through our civil rights and consumer fraud enforcement.”

She added, “We will aggressively pursue this case. We are simply trying to determine if the lending patterns by major financial institutions are equitable across the board.”

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