Bizzy’s Biz Links of the Day (062305)
Spitzer Appointed De Facto Bank Regulator
A federal judge Monday appointed Elliot Spitzer de facto regulator of national banks when he said okay to a Spitzer fishing expedition, despite the objections of the entity that actually is legally mandated to regulate national banks, the Office of the Comptroller of the Currency.
NEW YORK (Reuters) - A federal judge handed New York Attorney General Eliot Spitzer a victory on Monday when he refused to grant a temporary restraining order that would have stopped Spitzer from investigating large U.S. banks for their lending practices to minorities.
The order was sought by eight members of The Clearing House Association of 11 banks and the Office of the Comptroller of the Currency (OCC), which are suing Spitzer’s office on grounds that states do not have jurisdiction over national banks.
But Judge Sidney Stein in the Southern District of New York allowed Spitzer to continue his probe despite the suits.
The suit was filed on behalf of eight federally chartered banks of the 11-member association: JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC), Citigroup (C), Wachovia Corp. (WB), Bank of America Corp. (BAC), HSBC Holdings, LaSalle Bank Corp., and U.S. Bancorp (USB).
I have noted several times that I am less than pleased with the performance of the OCC, but that’s not the point. If the OCC isn’t doing its job, Congress and the President need to step in and give it new leadership and/or direction. It’s not Elliot Spitzer’s place to usurp OCC’s role.
While we’re on the subject, the claims of lending discrimination against minorities have always struck me as a case of wanting equal results regardless of merit, instead of trying to achieve results based on merit. Minorities get turned down more often for loans because they are more likely to have made financial mistakes that negatively affect their credit reports and credit scores. The scoring system itself is totally colorblind.
Supremes Fail to Stop Government Home Seizures
Of course that’s not how the headlines read, but that IS what happened:
WASHINGTON (AP) — Cities may bulldoze people’s homes to make way for shopping malls or other private development, a divided Supreme Court ruled Thursday, giving local governments broad power to seize private property to generate tax revenue.
In a scathing dissent, Justice Sandra Day O’Connor said the decision bowed to the rich and powerful at the expense of middle-class Americans.
The 5-4 decision means that homeowners will have more limited rights. Still, legal experts said they didn’t expect a rush to claim homes.
“The message of the case to cities is yes, you can use eminent domain, but you better be careful and conduct hearings,” said Thomas Merrill, a Columbia law professor specializing in property rights.
City, county, and state governments have always had the right of eminent domain for truly public purposes: i.e., to build roads, bridges, etc. But the idea that these governments can force homeowners to sell, even if fairly compensated, so a private developer blessed by the government can build a privately owned facility (shopping mall, office complex, etc.) is offensive.
The court’s ruling runs against a trend (about 3/4 of the way down the page) that had been building in lower courts. Outrages like this show why the choices for the next Supreme Court justices are so important.
China Shopping
I’d be more open to the idea of allowing Chinese companies to buy US companies if:
- The Chinese companies were truly private entities (but they’re not).
- The Chinese yuan were allowed to float against other currencies (but it’s not).
- US and other foreign companies were allowed to buy Chinese companies outright (but they can’t).
Until those three fundamental issues are resolved, I’m totally against what is effectively Chinese state ownership of US firms.
