State Attorney Generals Warned Feds About Loan Problems, In 2003

The battle between social the Federal governments housing goals and the states trying to get a hand on predatory lending has been going on for years. The utopian’s in the government pushed increased levels of homeownership while the state attorney generals were looking at the expected aftermath.

Guess who won in 2003, and who was right in 2008?

Roy Cooper of North Carolina and Tom Miller of Iowa headed a committee of state officials concerned about new forms of “predatory” lending. They urged Hawke to give states more latitude to limit exorbitant interest rates and fine-print fees. “People out there are struggling with oppressive loans,” Cooper recalls saying.

Hawke, a veteran banking industry lawyer appointed to head the OCC by President Bill Clinton in 1998, wouldn’t budge. He said he would reinforce federal policies that hindered states from reining in lenders. The AGs left the tense hour-long meeting realizing that Washington had become a foe in the nascent fight against reckless real estate finance. The OCC “took 50 sheriffs off the job during the time the mortgage lending industry was becoming the Wild West,” Cooper says