State officials hope to keep state banking control

John D. Hawke Jr., Comptroller of the Currency, has been taking steps to reduce the portion of banks chartered by states so eventually all banks may be federally chartered, said Rep. Charles Sargent, R-Franklin, after the delegation returned from the two-day trip on Friday.

“By doing this, he’s pre-empting all state laws over banking,” Sargent said.

Federal bank regulators “are good at protecting against $60 million losses,” Sargent said. “But they dont have the ability or manpower to protect the general public.”

Gov. Phil Bredesen’s administration had spent months working with consumer advocates and banking lobbyists on legislation to prevent lenders from duping homeowners into taking new loans packed with steep fees and high interest rates.

Those efforts unraveled in light of the new federal regulations.

Sargent said the issue is about more than controlling predatory lenders. “When our commissioner cant go in and see if a bank is solvent or not, thats not right,” Sargent told the Williamson County Review Appeal.

The delegation was led by Financial Institutions Commissioner Kevin Lavender, who has been asked to testify next month at hearings of a subcommittee of the House Banking Committee.

Also on the trip were Commerce and Insurance Commissioner Paula Flowers and state House Speaker Pro Tem Lois DeBerry, D-Memphis.