Household HSBC Watch

August 8, 2005 - New York Attorney General Eliot Spitzer sought dismissal of a case brought by a banking regulator, saying it attempts to strip states of their power to probe mortgage-lending practices at national banks. The U.S. Office of the Comptroller of the Currency, which regulates national banks, sued Spitzer’s office for seeking mortgage data from nationally chartered institutions. The agency and several banks, including JPMorgan Chase & Co. and HSBC Bank USA, said Spitzer exceeded his authority in requesting the information. A federal judge last month stopped the attorney general’s probe until the lawsuit is settled.

“The OCC does not have the authority to promulgate rules that strip states of their statutory and common law authority to investigate and bring judicial actions to enforce non-preempted state laws,” Spitzer wrote in a counterclaim filed late Friday in the U.S. District Court in Manhattan. Spitzer’s office argued that the agency’s efforts to prevent him from obtaining lending data run contrary to U.S. laws giving state regulators enforcement authority to punish discriminatory lending. The attorney general and consumer groups accused federal regulators of turning a blind eye to unfair lending.

Spitzer in April launched an inquiry into the mortgage lending practices of at least three banks — JPMorgan, HSBC and Wells Fargo Bank. It was Spitzer’s first foray into consumer banking after probes of the securities, mutual fund and insurance industries for practices he claimed were abusive