By Andrew Hagen
Joe Nocera, the New York Times’ newest columnist, wrote an illustrative piece today, outlining the ways that the Office of the Comptroller of the Currency (OCC) is nothing but a stoolpigeon for the big banks. The OCC refers to banks as “clients” which indicates that the agency has completely forgotten who pays their bills and who they work for – the taxpaying citizens of this country. Oh, that’s right. I forgot the Supreme Court is already well on it’s way in expanding corporate citizenship in this country. But corporations get an even better level of citizenship than your average Joe. Not only are they funded by shareholder money, but also cannot be sent to jail for any actions it takes – corporations don’t commit crimes, people that make up corporations do. And these corporations have such ridiculous structures that often the CEO can plead ignorance of the behavior of his subordinates and get away with it. Last time I checked, ignorance of the law cannot be used to claim innocence, and ignorance of illegal behavior that you should know about is not part of “best practices” (a doctor must keep up to date on new procedures, an account up to date on new regulations, etc.) and probably conspiracy or aiding and abetting.
I think that Nocera skips over what could be the most interesting part of the story, however. If the Republican attorney’s general, do walk away from their suit of the banks the case will most likely fall apart. But if the Republican AGs stick with it, or if the Democratic AGs keep up the fight, then it would pose an interesting conflict.
The OCC has been using “pre-emption” to defend the banks and financial institutions from more stringent regulations that attempt to impose increased transparency and consumer protection than federal regulations require. Pre-emption argues that because the banks fall under federal regulations, the federal rules override state rules. This is a prima facie bogus argument. There are many instances where the federal government has baseline regulations, where states build upon federal laws. Look at the minimum wage, for example. The federal government will set a “floor” wage that employees throughout the country must be paid, however, many states actually require a higher minimum wage than this federal rate (Washington, California, etc.), while others don’t (like Texas, Alaska, etc.).
The interesting part, however, comes if the challenge goes all the way to the Supreme Court. It would essentially be a case of states’ rights against lax federal regulations of businesses that often find themselves allied with Republicans, who also currently control the Court.
I have no doubt that Justices Thomas, Scalia, Roberts, and Alito would figure out some half-sane way of wiggling through this contradiction giving the OCC (the banks’ surrogate) their desired lack of regulations without impeding on their precious states’ rights political positions (at least not obviously). I would enjoy seeing them wriggle though, especially if the case was being argued by a Republican AG.
My final thought comes back to the OCC. This whole situation reeks of the same stench that infected the Mineral Management Service which was full of former oil company employees that liked to have sex and drug parties with their former employers. I have an easier time letting Obama slide a little in not cleaning out the MMS when he first got into office since it wasn’t a huge priority at the time, however, I see no reason for Obama to have not immediately shortened the leash of the OCC upon entering office. Considering we were in financial and economic free fall when he got elected and the Dodd-Frank bill to regulate banks (which isn’t even that strong) was supposed to be a big deal, how can Obama allow an executive branch agency openly work against his policies? I am afraid that this is yet another example of Obama’s lack of spine and awareness of his administration’s activities in lower level, but still very important, departments.
Joe Nocera, the New York Times’ newest columnist, wrote an illustrative piece today, outlining the ways that the Office of the Comptroller of the Currency (OCC) is nothing but a stoolpigeon for the big banks. The OCC refers to banks as “clients” which indicates that the agency has completely forgotten who pays their bills and who they work for – the taxpaying citizens of this country. Oh, that’s right. I forgot the Supreme Court is already well on it’s way in expanding corporate citizenship in this country. But corporations get an even better level of citizenship than your average Joe. Not only are they funded by shareholder money, but also cannot be sent to jail for any actions it takes – corporations don’t commit crimes, people that make up corporations do. And these corporations have such ridiculous structures that often the CEO can plead ignorance of the behavior of his subordinates and get away with it. Last time I checked, ignorance of the law cannot be used to claim innocence, and ignorance of illegal behavior that you should know about is not part of “best practices” (a doctor must keep up to date on new procedures, an account up to date on new regulations, etc.) and probably conspiracy or aiding and abetting.
I think that Nocera skips over what could be the most interesting part of the story, however. If the Republican attorney’s general, do walk away from their suit of the banks the case will most likely fall apart. But if the Republican AGs stick with it, or if the Democratic AGs keep up the fight, then it would pose an interesting conflict.
The OCC has been using “pre-emption” to defend the banks and financial institutions from more stringent regulations that attempt to impose increased transparency and consumer protection than federal regulations require. Pre-emption argues that because the banks fall under federal regulations, the federal rules override state rules. This is a prima facie bogus argument. There are many instances where the federal government has baseline regulations, where states build upon federal laws. Look at the minimum wage, for example. The federal government will set a “floor” wage that employees throughout the country must be paid, however, many states actually require a higher minimum wage than this federal rate (Washington, California, etc.), while others don’t (like Texas, Alaska, etc.).
The interesting part, however, comes if the challenge goes all the way to the Supreme Court. It would essentially be a case of states’ rights against lax federal regulations of businesses that often find themselves allied with Republicans, who also currently control the Court.
I have no doubt that Justices Thomas, Scalia, Roberts, and Alito would figure out some half-sane way of wiggling through this contradiction giving the OCC (the banks’ surrogate) their desired lack of regulations without impeding on their precious states’ rights political positions (at least not obviously). I would enjoy seeing them wriggle though, especially if the case was being argued by a Republican AG.
My final thought comes back to the OCC. This whole situation reeks of the same stench that infected the Mineral Management Service which was full of former oil company employees that liked to have sex and drug parties with their former employers. I have an easier time letting Obama slide a little in not cleaning out the MMS when he first got into office since it wasn’t a huge priority at the time, however, I see no reason for Obama to have not immediately shortened the leash of the OCC upon entering office. Considering we were in financial and economic free fall when he got elected and the Dodd-Frank bill to regulate banks (which isn’t even that strong) was supposed to be a big deal, how can Obama allow an executive branch agency openly work against his policies? I am afraid that this is yet another example of Obama’s lack of spine and awareness of his administration’s activities in lower level, but still very important, departments.
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