A federal judge refused on Monday to grant a temporary restraining order that would have stopped New York Attorney General Eliot Spitzer from investigating large U.S. banks for their lending practices to minorities.
The order was sought by The Clearing House Association of 11 banks and the Office of the Comptroller of the Currency (OCC), which are suing Spitzer's office on grounds that states do not have jurisdiction over national banks.
Judge Sidney Stein in the Southern District of New York handed Spitzer a symbolic victory by allowing his probe to continue despite the suits.
Eight of the 11 banks are federally chartered national banks, including JPMorgan Chase & Co., Wells Fargo & Co., Citigroup, Deutsche Bank AG, Wachovia Corp., Bank of America Corp. and The Bank of New York Co.
At least three of the Clearing House banks — JP Morgan, Wells Fargo and HSBC Holdings — are being investigated by Spitzer over the terms and conditions under which they lend minorities.
In April, Spitzer sent letters to lenders, asking how they set loan prices and fees after U.S. government loan pricing data from mortgage lenders in March showed minorities frequently paid higher interest rates and higher fees than white customers.
"We will continue to analyze the data ... nothing has changed," said Deputy Attorney General Dietrich Snell after the ruling.
The OCC, part of the U.S. Treasury, and the bank group filed suit against the attorney general's office last Thursday.
Spitzer called the OCC's actions "shameful" and questioned its claim that his investigation was interfering with the OCC.
The OCC regulates and supervises all national banks as well as branches and agencies of non-U.S. banks.
The 150-year-old Clearing House Association lobbies on behalf of its membership on issues like regulation and accounting rules.
