Cuomo vs. Clearing House Represents Victory for Taxpayers

Jun 29, 2009, 12:08 ET from Center for Responsible Lending

WASHINGTON, June 29 /PRNewswire-USNewswire/ -- The following is a statement from Michael Calhoun - President, Center for Responsible Lending:

"Today the Supreme Court announced a decision that will play a major role in how and whether consumer protection laws are enforced. In Andrew Cuomo vs. the Clearing House Association and the Office of the Comptroller of the Currency (OCC), the court overturned lower court decisions, determining that states can enforce their own civil rights laws, including pursuing claims against national banks, when necessary, to ensure that banks follow the law.

This Supreme Court decision is a victory for taxpayers, who have suffered enormously as a result of abusive business practices in all types of lending. This decision will help to restore confidence in the financial services industry and the national economy.

Today's decision addressed only whether states could enforce their valid laws. As Congress considers how to overhaul the federal regulation of financial products, it must determine whether Washington can override, and thereby nullify, state civil rights and consumer protection law.

One of the key lessons of today's financial crisis is that federal efforts to prevent abusive financial practices should complement, rather than supplant, state consumer protection and civil rights laws. Previously, many states tried to address dangerous lending practices by passing laws to address some of the most egregious abuses. But their efforts were thwarted by federal regulators, who argued that state consumer protection laws don't apply to federally-supervised banks.

Any plan passed by Congress to fix our broken financial system should not strip the states' authority to address local issues and protect their own citizens, especially since lending practices are constantly evolving and can vary considerably by location. Federal law should be a floor, not a ceiling, for preventing the type of discriminatory and reckless lending that triggered today's financial crisis."

The Center for Responsible Lending submitted an amicus brief in the Cuomo case in partnership with these organizations:

    National Consumer Law Center
    U.S. Public Interest Research Group
    National Association of Consumer Advocates
    South Brooklyn Legal Services
    Consumers Union
    Public Citizen
    New York City's Department of Consumer Affairs
    Consumer Federation of America

For more information from CRL contact: Kathleen Day at (202) 349-1871; or Ginna Green at (510) 379-5513; or Charlene Crowell at (919) 313-8523

About the Center for Responsible Lending

The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation's largest community development financial institutions.

SOURCE Center for Responsible Lending