In the late 1990s, North Carolina saw an upsurge in cases where banks tricked
elderly homeowners into refinancing with high interest-rate loans carrying hidden fees. In response, the state enacted a law
against such "predatory-lending" tactics.
Now the law is being undermined by an obscure federal agency. The Office of the Comptroller of the Currency
(OCC), a branch of the Treasury Department (news - web sites) that regulates banks, ruled this winter that 14 state
predatory-lending laws - and a host of other consumer-protection laws across the USA - do not apply to banks chartered by
the federal government. Instead, the OCC says it will take over the job of protecting consumers who use some 2,100 banks regulated
by Washington. These national institutions, including the largest banks in the USA, account for 55% of bank assets.
The new rules are meant to provide uniform oversight of an industry that has been transformed in recent decades from predominantly
local operations to huge institutions with branches from coast to coast. But the change threatens strong consumer-protection
laws that have been the responsibility of states for more than a century. ...
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