Some three weeks before New York Governor Eliot Spitzer was forced to resign his office in disgrace (sex! scandal! floozies!), he published an op-ed in the Washington Post. Titled "Predatory Lenders' Partner in Crime: How the Bush Administration Stopped the States From Stepping In to Help Consumers," the piece expressed Spitzer's concern that for several years there had been a marked increase in predatory lending practices, including distortion of terms, surprise balloon payments, hidden fees and deceptive "teaser" rates. These practices, he wrote, were having a "devastating effect on home buyers." In addition, the sheer number of such transactions, "if left unchecked, threaten...our financial markets." To those in the know (OK, those few egghead "elites" not enthralled by the birth of the Brangelina twins), the situation loomed so egregious that the attorneys general of all fifty states, both Democrats and Republicans, lodged suits against the worst predatory subprime lenders. A number of states, including New York, passed laws to rein in such practices.
What happened next was rather astonishing, even by current Republican standards.
Williams writes that "the Bush administration employed a little-used 1863 law to annul all state antipredatory-lending laws and, if that wasn't enough, to block states from enforcing their own consumer protection laws in suits against national banks."
Ironically, Republican operatives and right-wing radio hosts are now scapegoating black homeowners and "Franklin Raines, former head of Fannie Mae, the single black head of any organization implicated in this mess."
For details, read the whole article.
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