The District Chronicles

Issue date: 7/26/09 Section: Business

A closer look at mortgage data showed banks gave more predatory loans in minority communities

(NNPA) - In Cuomo v. Clearing House Association, the U. S. Supreme Court has confirmed that America's fair lending laws should be vigorously enforced by all levels of government. The NAACP Legal Defense and Educational Fund, Inc. (LDF) is pleased that the Court, last month, rejected the attempt by federal regulators and national banks to prevent states from enforcing their own fair lending laws. The Court's ruling permits states to step up their efforts to curb discrimination in sub-prime lending markets, and is especially timely given that predatory lending has exacerbated the impact of the current economic crisis on minority communities.

''As the Court clearly recognized, this is a time when more - not less - enforcement of fair-lending laws is essential,'' said John Payton, LDF President and Director-Counsel.

The Cuomo case began in 2005, when the New York Attorney General launched an investigation into potential discrimination by national banks. Mortgage lending data indicated that national banks had issued a significantly higher percentage of high-interest predatory loans to African-American and Hispanic borrowers than to White borrowers.

The Office of the Comptroller of the Currency (OCC), a small agency within the U.S. Treasury Department, went to court to stop the New York Attorney General's investigation. OCC's suit was joined by an association of national banks.

Justice Antonin Scalia, writing for the Court, correctly rejected the federal agency's attempt ''to do what Congress declined to do: exempt national banks from all state banking laws, or at least state enforcement of those laws.''

The Supreme Court's ruling restores the collaborative federal-state regulatory scheme that Congress designed to address the persistence of lending discrimination, which has contributed to the recent surge in foreclosures nationwide.

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