Spitzer Countersues U.S. Bank Regulator

New York Atty. Gen. Eliot Spitzer is seeking 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, a unit of HSBC Holdings, said Spitzer had 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 U.S. District Court in Manhattan.

Spitzer’s office argued that the agency’s efforts to prevent him from obtaining lending data ran 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 and attempting to “usurp traditional state authority” by objecting to his probe.

Kevin Mukri, a spokesman for the comptroller’s office, said the agency would not comment until its attorneys had read the brief. Brad Maione, Spitzer’s spokesman, said the attorney general would comment today.

Spitzer asked the judge to declare that the National Bank Act didn’t take away the states’ authority to enforce non-preempted state laws.

The comptroller’s lawsuit, he wrote, “is nothing more than a naked attempt to expand the OCC’s power.”

Spitzer in April launched an inquiry into the mortgage lending practices of at least three banks -- JPMorgan, HSBC and Wells Fargo & Co.’s Wells Fargo Bank. It was Spitzer’s first move into consumer banking after probes of the securities, mutual fund and insurance industries.