Spitzer says chance to probe bank lending was lost

NEW YORK, June 29 (Reuters) - Former New York Governor Eliot Spitzer hailed the U.S. Supreme Court's decision on Monday that allows the state's mortgage lending probe, one initiated by Spitzer in 2005, to finally proceed.

Yet the former attorney general also lamented the lost opportunity regulators had to question and possibly halt subprime mortgage activities.

"This is a big win for law enforcement and for those who believe that banks need to have an appropriate level of scrutiny," said Spitzer, who resigned as governor at the beginning of 2008.

Andrew Cuomo, the current New York attorney general, had brought the case, wanting to revive Spitzer's probe into possible race discrimination in lending.

The nation's highest court ruled 5-4 to overturn an appellate court ruling that had blocked the state from investigating or enforcing fair lending laws against nationally chartered banks.

"The question that bothered us several years back when we began this case was whether banks were lending fairly and properly to people. It was partially the concern about disparate lending practices based on race, partially the concern that subprime debt was becoming pervasive and somewhat problematic," Spitzer said in a brief telephone interview. (Reporting by Joseph A. Giannone; Editing by Tim Dobbyn)