UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

June 30, 2009

SUPREME COURT STRENGTHENS STATES' POWER OVER BANKS

Washington Post - For years, state governments have had little power to enforce consumer-protection and lending rules at the country's biggest banks. No more. In a decision that marked a major victory for consumer advocates, the Supreme Court held that states can challenge the practices of national banks in court.

Major banks have long argued that only federal bank regulators can compel them to comply with rules meant to protect consumers from potentially unfair lending practices or pursue cases of potential discrimination against minorities.

The Supreme Court, in a 5-4 decision, disagreed, concluding that state attorneys general can go after national banks on such matters. The court found, however, that states cannot unilaterally require banks to turn over information or change their behavior, the way a regulator can. Rather, they must take the banks to court.

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