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Justice Scalia breaks ranks, slams Bush officials on bank regulation

Scalia breaks ranks, slams Bush officials on bank regulation

Kevin G. Hall | McClatchy Newspapers

last updated: June 29, 2009 04:52:40 PM

WASHINGTON — In a rebuke of the Bush administration, the Supreme Court ruled Monday that a federal bank regulator erred in quashing efforts by New York state to combat the kind of predatory mortgage lending that triggered the nation's financial crisis.

The 5-4 ruling by the high court was unusual. Justice Antonin Scalia, arguably the most conservative jurist, wrote the majority's opinion and was joined by the court's four liberal judges.

The five justices held that contrary to what the Bush administration had argued, states can enforce their own laws on matters such as discrimination and predatory lending, even if that crosses into areas under federal regulation.

Justice Clarence Thomas, writing for the four dissenters, argued that laws dating back to the nation's founding prevent states from meddling in federal bank regulation. He was joined by Chief Justice John G. Roberts and justices Anthony Kennedy and Samuel Alito.

The ruling angered many in the financial sector, who fear it'll lead to a patchwork of state laws that'll make it harder for banks and other financial firms to take a national approach to the marketplace.

"We are worried about the effect that this ruling could have on the markets," said Rich Whiting, general counsel for the Financial Services Roundtable, a trade group representing the nation's 100 largest financial firms, in a statement. The decision "hinders the ability of financial services firms from conducting business in the United States


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What is predatory lending?

A loan that is suited for an environment of expanding debt and inflation will not work when the recession comes. While it's true that some people who didn't understand what they were signing bought houses that they would only be able to afford if prices continued to rise, this is a function of monetary policy. This should not be looked at as predatory lending unless we expect all loan officers to have an understanding of monetary policy. No matter what loan you look at, interest only, arms, etc. They are suited for an environment of falling interest rates, expanding monetary base, and house juggling encouraged by the Congress and Federal Reserve. When your living in a fish tank, you learn to breathe water. This is why monetary policy is so important....it's all malinvestment and distortion....and now misplaced blame.

"Government spending cannot create additional jobs. If the government provides the funds required by taxing the citizens or by borrowing from the public, it abolishes on the one hand as many jobs as it creates on the other.", www.mises.org

"Endless money forms the sinews of war." - Cicero, www.freedomshift.blogspot.com

Just because the Federal govt may have an interest

that doesnt' negate the states ability to regulate its affairs internally. This is a huge victory for states rights and the continual battle for freedom.

Thank you Justice Scalia

This along with the overturned Sotomayor decision gives us something to smile about today.

I do not know how to respond...

The first victory for the American people in so long I am amazed to say the least. Imagine the Supreme Court ruling in favor of the constitution, did somebody miss a payment... lol

In the beginning of a change the patriot is a scarce man, and brave, and hated and scorned. When his cause succeeds, the timid join him, for then it costs nothing to be a patriot.
~Mark Twain

Always remember:
"It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds." ~ Samuel Adams
If they hate us for our freedom, they must LOVE us now....

Stay IRATE, remain TIRELESS, an

meekandmild's picture

ART 1Sec 8 of the constitution

does not give the US government authority to make "banking regulations",
but does the US government get some control when banking is done across state lines?

We need to get

Dr. Paul's input on this...

I wonder what would happen if some of the states, like California for example, grabbed hold of this and went after some big corps...

"Unite Or Die"..