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Spitzer Wins Support in Probe of Lenders

August 09, 2005|From Bloomberg News

New York Atty. Gen. Eliot Spitzer won support from 34 attorneys general and a Realtors association in his legal battle against a U.S. banking regulator's effort to stop his probe of mortgage lending practices.

Spitzer is seeking to dismiss a case filed against his office by the U.S. Office of the Comptroller of the Currency, which claims that he exceeded his jurisdiction by demanding mortgage lending records from nationally chartered banks. The National Assn. of Realtors defended Spitzer's probe, saying in court papers that the comptroller's actions hinder what could be a collaborative effort to crack down on discriminatory practices.

"It is the state that is in the best position to identify any discriminatory practices or patterns within that state's real estate industry because the state is closest to the participants and because real estate is uniquely tailored to each locality," the association said in a brief filed in U.S. District Court in Manhattan.

A federal judge last month stopped Spitzer's inquiry into the mortgage lending practices of several banks, including Citigroup Inc.'s Citibank, JPMorgan Chase & Co., HSBC Bank USA and Wells Fargo Bank. The comptroller's office contended that Spitzer overstepped his authority and interfered with the regulator's bank examinations.

Kevin Mukri, a spokesman for the comptroller's office, declined to comment Monday.

"The OCC will respond in accordance with the court schedule," Mukri said.

The attorneys general said the comptroller's office was backing the interests of the large national banks to woo more institutions to a national charter and thereby increase its stature and power.

The brief was filed late Friday in federal court, said Tom Dresslar, a spokesman for the California attorney general's office.

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