View amicus brief

Armed with data showing disparate and unequal treatment of minority borrowers in New York City, Comptroller William C. Thompson, Jr. today asked the U.S. Supreme Court to support the State Attorney General’s right to investigate national banks for possible violations of state fair lending laws.

“In New York City, African-American and Hispanic home buyers and owners, at all income levels, have been the victims of disparate and unequal treatment by home mortgage lenders, including national banks and their affiliates,” Thompson said in an amicus brief filed today. “Our information shows a clear pattern of racial disparities in the lending practices of banking institutions in the city.”

Thompson’s brief was filed in support of the New York State Attorney General’s appeal seeking the authority to investigate the questionable lending practices of banking institutions in New York. The case, Cuomo vs. Clearing House Association LLC, will resolve the broad issue of whether states can investigate national banks for possible violations of state law.

Thompson’s submission – available at www.comptroller.nyc.gov - provides the Court with data collected by his Community Action Center (CAC) through its Foreclosure Prevention Helpline. Thompson’s office used that data to produce detailed maps showing that foreclosure rates are much higher in minority communities in New York City irrespective of income levels.

Thompson’s submission illustrates that in New York City there is a clear distinction between the banks’ treatment of minority and white residents that clearly justify the Attorney General’s investigation.

“After years of unchecked subprime lending, the subprime crisis occurred, followed by national and worldwide financial crises,” Thompson said. “Earlier scrutiny, exposure and correction of national banks’ abusive subprime lending practices, such as unequal treatment of minority borrowers, might have lessened those crises.”

“For that reason, it is vital that Attorney General Cuomo and other State regulators be permitted to investigate the home lending practices and other legal compliance of national banks.”

In April 2007, Thompson launched a Foreclosure Prevention Helpline – at (212) 669-4600 – to help individuals and families confronted with losing their homes. The Helpline since has received more than 4,100 calls, resulting in 2,200 cases being opened.

“The aftermath in the city and nation of the courses of action undertaken by mortgage lenders during the subprime ‘boom’ highlights the need for State authorities, intimately familiar with local housing and lending markets and conditions, to be able to investigate national bank lenders’ compliance with State law,” Thompson said.

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