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GOVERNMENT AFFAIRS: In the States
Detroit's Mayor vetoes ordinance passed by Detroit City Council
In December, Detroit's City Council passed an ordinance to regulate the mortgage lending industry. This action occurred while imminent passage of a state bill to address mortgage lending appeared certain. This bill not only addressed the issues raised in the ordinance but also contained strong preemption language prohibiting cities and counties from regulating the industry.
The Detroit City Council had also been advised by its own legal counsel that such action would exceed its authority and invite litigation. Despite these factors, the Detroit City Council passed the ordinance to relieve the political pressure they were experiencing from local advocacy groups.
Detroit mayor Kwame Kilpatrick, mindful of these issues, vetoed the ordinance prior to the end of the year. In his veto letter, Kilpatrick cited both the state preemption and counsel's advise to the City Council as factors in his decision and also referenced that the ordinance created an illegal private right of action.
"I must veto the ordinance because it is of no legal force or effect," said Kilpatrick in his letter. "As elected officials, we owe our citizens the duty of acting in their best interests. It is not sound public policy to pass laws that have no impact and only serve to create false expectations. In addition, at this time of economic downturn, it is a poor use of City funds and resources to move forward with this ordinance. City dollars are being wasted by publishing an ordinance that has no legal validity."
The Mayor also expresses his support for educational efforts to supplement the new protections offered by the state law.
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