Felix Salmon, not an Okie, alas, picks up on a silly quote Comptroller of the Currency John Dugan, who was gutted in a fantastic New York Times piece on Sunday, gives the Banker:

“One area that stands out is loan underwriting,” Dugan said in an e-mail. “For example, a consumer agency might think that down payments on house purchases should be limited to 5% to promote homeownership, while a safety and soundness regulator might believe a higher minimum could be needed to ensure lenders don’t make loans that won’t be repaid.

Salmon on that straw man:

The fact is of course that loose underwriting is as bad if not worse for consumers as it is for banks, and no consumer financial protection agency is going to condone it. After all, if banks lose money on bad underwriting, that’s because their consumers can’t pay back their loans — and if they can’t pay back their loans, that means they’re in bad financial shape. You don’t protect consumers by encouraging them to get into bad financial shape. This is not rocket science.

No it isn’t. Hopkins also takes the torch to it (emphasis mine):

But the argument relies on the idea that the new agency would proactively seek to extend consumer credit, for example, or otherwise push for policy goals like broader homeownership.

The regulatory reform bills in both the House and Senate, however, do not give the consumer agency that kind of mandate. Instead, it is largely designed to curb abusive business practices. Its purview does not include the Community Reinvestment Act, a law designed to ensure banks are lending in their own communities. (CRA rule-writing and enforcement are left to the banking agencies under both bills.)

Too often journalists let that kind of spin go unchecked in a he-said/she-said manner that ultimately does nothing more than help those who push falsehoods and distortions like the banks are doing here. The Banker doesn’t let the bankers get away with that here. That’s how it’s done.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.