Perhaps a little more light has shone...

There was an interesting article in The New York Times this past Friday.  "Does This Bank Watchdog Have A Bite?" by Andrew Martin highlighted the preemption controversy continuing between State banking regulators and the Office of the Comptroller of the Currency, one of five federal banking regulators purportedly on the beat.  See generally http://www.sec.gov/answers/bankreg.htm.

The Times piece quotes two Attorneys General who cite outright favoritism towards banks at the OCC, an agency from which tens of thousands of customers annually seek redress.  The OCC chief is a former bank lobbyist who during the present crisis has voted against 1) limits on banks' ability to raise interest rates on existing credit card balances and 2) assessments on banks to strengthen the FDIC insurance fund,  Joining the State officials in bewilderment are a law professor, a lawyer for the Center for Responsible Lending, an official at the Consumer Federation of America  - even a judge who debunked one bank's effective choosing of the more lenient regulator by filing for a national charter amidst a State investigation.  See Capital One Bank v. McGraw, 563 F. Supp. 2d 613 (S.D.W.Va. 2008 )(J. Goodwin).  As Judge Goodwin aptly noted,

If the OCC fails adequately to enforce state law against national banks, state officials could bear the brunt of public disapproval while federal officials remain insulated from the electoral ramifications of their enforcement policies.  Moreover, it is questionable whether the OCC will be as motivated or as effective in protecting the consumers of West Virginia as is the West Virginia Attorney General.

If there is a sliver of a silver lining in this recession, perhaps we've collectively learned that what masquerades as bureaucratic waste can be something much more pernicious.  And if there is to be justice, perhaps Congress will eliminate the right duplicative banking agency when it takes up H.R. 4173, the House reform Bill from December that proposes the outright elimination of the Office of Thrift Supervision (at section 1207).

---JSC, 3/29/10