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OCC Should Let Spitzer Enforce Anti-Discrimination Laws

Friday, August 5, 2005

WASHINGTON, D.C. – The Center for Responsible Lending joined today with 15 other groups in filing a brief supporting New York Attorney General Eliot Spitzer's efforts to enforce discrimination laws against national banks.

Spitzer asked the banks to explain why the numbers the federal government requires them to make public each year show racial disparities in the banks' mortgage lending.

Some banks contend a state official like Spitzer doesn't have the authority to enforce state discrimination laws against them. Their federal regulator, the Office of the Comptroller of the Currency, agrees and sued Spitzer. The Comptroller sued the same day the Clearing House Association, a group of banks including JPMorgan Chase, HSBC, and Wells Fargo, asked a federal court to bar Spitzer from making them reveal the information.

The Center for Responsible Lending, a nonprofit, nonpartisan research and advocacy group, opposes the federal agency's aggressive effort to overturn decades of state and local governments enforcing their own fair-lending laws and says federal law supports the center's position.

The numbers that concern Spitzer are disclosed annually by the banks under the federal Home Mortgage Disclosure Act, which this year for the first time required banks to tell how many high-priced loans they made last year. These loans are defined as carrying interest rates and fees three or more percentage points above comparable Treasury securities (or five or more percentage points for junior liens like second mortgages).

African-Americans are three times more likely to get these higher-cost loans, according to an analysis by the National Community Reinvestment Coalition, which represents hundreds of community groups. Predatory lenders do most of their business in this market, which has exploded in the last decade. Predatory loans threaten working-class people with financial reverses and even the loss of their homes and expose fragile neighborhoods to the blight of foreclosures and boarded-up houses.

The banks contend that only the federal government has the power to enforce even state laws against national banks. The Center for Responsible Lending disagrees, saying the Comptroller of the Currency should stop helping them oppose Spitzer's legitimate attempt to enforce state law.

"There is no reason why banks should have an exemption from state enforcement of civil rights laws," said Eric Halperin, senior policy counsel at the Center for Responsible Lending. "If national banks are not discriminating, they should have no problem providing information to the attorney general."

"We hope a commitment to freeing the credit marketplace of discrimination is something every public official shares," said Halperin. "Unfortunately, the Office of the Comptroller of the Currency has chosen to fight for turf instead of fairness. We are disappointed by its choice of priorities."

Said John Taylor, president and CEO of the National Community Reinvestment Coalition: "Whenever a systematic disparity in mortgage lending occurs, it's a civil rights issue, plain and simple. Civil rights is not an issue of preemption, it's a national priority. NCRC's membership is committed to eliminating the dual lending marketplace both in New York and across the nation. We stand hand in hand with Eliot Spitzer to ensure equal access to credit."

Among the groups joining the legal brief are the National Community Reinvestment Coalition, the National Fair Housing Alliance, the National Association of Consumer Advocates, AARP and the NAACP Legal Defense and Educational Fund Inc. and these New York state groups: The Fair Housing Justice Center of HELP USA, the Neighborhood Economic Development Advocacy Project and the Foreclosure Prevention Project of South Brooklyn Legal Services.

To read the brief, go to the center's website at

Contact: Michael Flagg at 202-349-1862 or