Spitzer's Litigation Example: A Legacy For New York

In New York, Forbes reports:

• New York Gov. Eliot Spitzer's political career may have been fatally undermined, but his pioneering use of litigation to catalyze regulatory and policy change will endure. New York State Attorney General Andrew M. Cuomo continues to follow Spitzer's example in this respect, despite complaints about his aggressive tactics.

• These initiatives have filled a regulatory gap opened by President George Bush's generally hands-off, market-friendly approach. Cuomo's investigations cover a broad spectrum of policy areas and, following the Spitzer pattern, tend to target conflicts of interest whereby companies have allegedly exploited consumers.

Among NY AG Cuomo's recent work is a mortgage appraisals investigation, in which a lawsuit was filed against First American Corporation and its appraisal unit, for allegedly conspiring with Washington Mutual to inflate its real estate appraisals. During the course of the investigation, Fannie Mae and Freddie Mac involuntarily got dragged into the fray and were ultimately persuaded (or strong-armed, depending on your point of view) by Cuomo to agree to change their practices to curb inflated mortgage appraisals (with a major assist earned by U.S. Senator Charles Schumer of New York, Chair of the Senate Banking Committee’s Housing Subcommittee, who no doubt "persuaded" the federal regulators at the Office of Federal Housing Enterprise Oversight ("OFHEO") - who have oversight responsibilities over Fannie and Freddie - to go along with the deal and concede the investigatory turf battle they may have had with the New York AG).

For the story, see Cuomo Follows Spitzer's Litigation Example.

In a related Op Ed piece in The Providence Journal, At least admire Spitzer for his foes. Cuomo OFHEO Fannie Mae Freddie Mac