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Press Release |
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WASHINGTON – Two leading consumer groups are seeking to force President Clinton’s nominee for top bank regulator to make national banks obey state consumer laws, such as New Jersey’s landmark "lifeline banking" law, as a condition of Senate confirmation.
Thursday, President Clinton announced he will nominate Treasury Undersecretary for Domestic Finance John Hawke as Comptroller of the Currency.
The consumer group’s letter was sent Friday to Senate Banking Committee Chair Al D’Amato, R-N.Y., and Ranking Member Paul Sarbanes, D-Md, by U.S. Public Interest Research Group and Consumers Union, publisher of Consumer Reports magazine. They say the approach of the Office of the Comptroller of the Currency (OCC) to federalism has had a chilling effect on advances in consumer protection banking laws in the states, such as the Garden State’s lifeline banking law. In addition, the groups are asking for Capitol Hill support to convince Clinton’s new nominee to endorse vital consumer safeguards for bank sales of insurance and investments.
"Over the past few years, the Office of the Comptroller of the Currency has issued opinions and taken positions at odds with the interests and needs of consumers," write Mary Griffin, an insurance counsel at CU and Ed Mierzwinski, consumer program director at U.S.PIRG. "Any candidate must commit to issuing consumer safeguards for bank retail sales ….and to reverse the OCC decision on New Jersey’s basic banking law and enunciate a preemption standard that is in line with traditional preemption principles."
The OCC recently issued its report on preemption, showing a number of instances in which the federal bank regulator has cleared the way for national banks to ignore state law. A 1992 decision by the OCC permitted national banks in the state of New Jersey to ignore a landmark law, which provides low-cost checking services to low and moderate income consumers, even though no federal law exists governing basic banking. Despite strong admonition by members of Congress, the OCC has yet to reverse its decision in favor of consumers.
At the same time OCC has been trampling on states’ rights, it has been remiss in its duty to protect consumers from deceptive and misleading practices of banks when they sell a wide array of uninsured financial products. With the help of OCC, banks have transformed into diversified financial powerhouses, selling stocks, bonds, and insurance products. Despite abundant evidence indicating the need for strong consumer safeguards, the OCC has failed to take strong regulatory action to stop these practices.
