Self-serving anti-consumer OCC must accept subprime blame
Substantiated reports are coming in that verify what we said since last August – the problem is not subprime, and the problem has little to do with poor people. One problem is collateralization of mortgage loans. Those loans would be pooled with similar loans, and slices of that pool were bought and sold as mortgage-backed securities. But one major problem are the childish ways of enforcing consumer safeguards. The Office of the Comproller of the Currency (OCC) prevailed. After all they are part of the Treasury Department. The move was self serving and anti-consumer. Here is why:
“…Almost its entire budget comes from fees it imposes on banks, which have the option of incorporating under state law. Put another way, the agency’s funding depends on keeping the banks happy. Little surprise, then, that the OCC acted when the national banks asked it to preempt subprime-mortgage laws such as Georgia’s, arguing that they conflicted with federal banking law.” said Nicholas Bagley in an article for the Washington Post. For more please see the entire article.
A self-serving bias occurs when people are more likely to claim responsibility for successes than failures. What we are seeing today is a failure by the OCC to regulate national banks in a manner that protects real people in America, and investors around the world.