Excerpt:
A new study from the University of North Carolina says that Federal regulators in the Bush administration blocked attempts by state governments to prevent the predatory lending practices that created a ripple effect resulting in the financial crisis currently stifling the U.S. economy.
A research paper published on Monday from UNC-Chapel Hill’s Center for Community Capital shows that those anti-predatory lending laws had actually worked. States that had stricter regulations on issuing mortgages were found to have fewer foreclosures.
Seven months before the collapse of Lehman Brothers and the government bailout of banks that was rammed through congress by the Bush administration, the former Governor of New York, Elliot Spitzer, wrote a column for the Washington Post describing the Bush administration’s efforts to block states from enforcing laws that may have prevented the crisis in the mortgage industry. Spitzer, who had a reputation for fighting corporate corruption, wrote:
As New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices. Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.
A month later the New York Times broke the well-known story linking Spitzer to a prostitution ring that ended his political career. According to investigative reporter Greg Palast and many others, that was not a coincidence.