Here’s something from a great 2002 Wall Street Journal leder by Jess Bravin and Paul Beckett headlined “Friendly Watchdog: Federal Regulator Often Helps Banks Fighting Consumers —- Dependent on Lenders’ Fees, OCC Takes Their Side Against Local, State Laws —- Defending Uniform Rules.” It shows how Hawke’s OCC actively fought against holding banks to account for their deceptive lending practices, even after complaints by what I think you could fairly call a “consumer group”:
In the FleetBoston case, the OCC received hundreds of letters from customers in 2000, complaining that the federally chartered bank had increased interest rates on its credit cards after allegedly promising a “fixed” rate. In response, the OCC sent customers letters saying it couldn’t help. Federal law “recognizes banks’ ability to change the terms of credit card account agreements,” as long as the change is disclosed, the OCC said in a typical letter sent to a complaining customer on March 23, 2000. “If you wish to pursue further remedy to your complaint, we can only suggest that you contact private legal counsel regarding any additional remedies,” the OCC added.
In October 2000, several customers filed suit, seeking class-action status and accusing FleetBoston of deceptive practices under Rhode Island state law. A Rhode Island state judge in Providence ruled in April that the case could proceed. But the OCC stepped in to help FleetBoston. The OCC argued in a friend-of-the-court brief that the state law on which the suit was based doesn’t apply to FleetBoston because the OCC can take action against unfair and deceptive practices, as it did in the Providian case — although the agency hadn’t done so regarding FleetBoston.
Here’s the American Banker in 2004:
A host of predatory practices — including equity stripping, loan-flipping, and insurance packing — have become part of the consumer finance lexicon. Industry advocates and the OCC have argued that these abuses are perpetrated by nondepository lenders, not banks. But some disagree.
“That is absolutely, 100% incorrect,” said Tom Methvin, the managing shareholder of the Montgomery, Ala. class action law firm Beasley, Allen, Crow, Methvin, Portis & Miles PC. “The depositories own the finance companies that are doing it all.”
Predatory lending has reached “epidemic proportions,” Mr. Methvin said. “Many times banks make loans to people who do not demonstrate the ability to repay, knowing they can come take the collateral and just sell it to someone else.”
This took me all of an hour and a half to find. It’s worth noting that Hawke was under oath. I have a request for comment out to Hawke, now a partner at Arnold & Porter LLP, where he “provides US and international financial institution clients with comprehensive regulatory, litigation, and transactional services.” Also: “The practice group is recognized for developing innovative structures and novel solutions to regulatory issues.”
The rest of the press ought to ask him for comment, too.