New York state said on Friday that its probe of national banks had shown a "significant racial disparity" in lending practices that might break laws even as the federal government moved again to shut the investigation down.
Attorney General Eliot Spitzer said his probe to see if minorities are being charged higher interest rates on home-mortgage loans had already shown a "significant racial disparity that could violate state civil rights laws."
He made the statement as the US Treasury bureau responsible for oversight of the national banking system asked a judge on Friday to block Spitzer's probe of the lending practices of national banks.
On Thursday, the Office of the Comptroller of the Currency, an arm of the Treasury Department that oversees the banking system, and the Clearing House Association, which represents national banks, had filed lawsuits in Manhattan.
At a brief hearing on Friday, lawyers on all sides were instructed to return to court tomorrow to argue whether Spitzer should be allowed to continue his probe while the unique contest over state and federal rights progressed through the courts.
In a statement, Spitzer said: "While such a move was expected from the banks, it is shameful that a federal regulator would join in an effort to shield the banks from scrutiny by state regulators."
Spitzer said the Treasury Department's efforts to protect banks have been opposed by all 50 state attorneys general and all 50 state banking superintendents.
In court papers, the Office of the Comptroller of the Currency said a federal judge should immediately suspend Spitzer's demands on the banks because letting his probe proceed would cause irreparable harm to the office's supervisory powers.
RSS