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Two recent news stories–dealing with banking and the airlines–makeme wonder more than ever about the wisdom of letting Uncle Samregulate the insurance industry outright. State oversight has itsfaults, but I fear consumers could be worse off if states arestripped entirely of their authority to hold insurers accountablefor poor market conduct.


On Dec. 4, the U.S. 2nd Circuit Court of Appeals in Manhattanupheld a lower court ruling that the Comptroller of the Currencyhas exclusive authority over federally-chartered banks.

Washington initiated the legal challenge when then New YorkAttorney General (now governor) Eliot Spitzer launched a probe intothe lending practices of three national banks, and indicated he hadevidence they had violated state civil rights laws. The proberevolved around whether the banks were charging higher interestrates on mortgages to minorities.

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