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Cover-Up: Acorn clones using the Community Reinvestment Act to shake down banks aren't happy with our campaign to expose the truth about the CRA's central role in the financial crisis.
The Greenlining Institute is typical. The Berkeley, Calif.-based community organizer fired off a letter to us complaining about our March 21 editorial "WaMu: Guilty Only Of CRA Compliance."
In it, we argued that Washington Mutual, a CRA poster boy in the run-up to the crisis, is now a convenient whipping boy for the same regulators who pressured the bank into making the "reckless" multicultural loans they're suing it over today.
"IBD's continued insistence that the Community Reinvestment Act was responsible for the subprime mortgage meltdown has been refuted by virtually every reputable authority in the field," wrote Greenlining spokesman Bruce Mirken. "That includes nine of 10 members of the Financial Crisis Inquiry Commission, including three out of four Republican appointees."
The Greenlining official added: "While some cling dearly to the myth that the CRA was the culprit, simply repeating a statement endlessly does not make it true."
Greenlining's pique is understandable. It helped fuel the subprime crisis by using the CRA to leverage large banks like WaMu for record loan set-asides for uncreditworthy minorities. Then it extorted even more money when the banks announced merger plans, filing protests with federal regulators to delay their bids.
Greenlining even got a sweetheart WaMu mortgage for its own headquarters, according to the new book "The Great American Bank Robbery."
Now that the risky CRA loans that Greenlining pushed have led to record foreclosures, renewed inner-city blight and a widening of the racial "mortgage gap," Greenlining is lobbying Democrats to broaden the CRA's powers to close the mortgage gap and the "growing racial wealth gap."
In testimony last year, its executive director proposed subjecting all of corporate America to anti-discrimination regulation, not just banks.
Greenlining also worked behind the scenes with the Democrat-led Financial Crisis Inquiry Commission, or FCIC, which misled the public by whitewashing the CRA's role in the crisis. The dishonesty in its final report, now in bookstores, is breathtaking — from its twisting and censoring of key facts to its shameless revising of history.
In light of the Obama administration's stated goal of expanding the CRA, separating fact from fiction regarding this issue is of towering importance — to set the historic record straight and to prevent another financial calamity.
FICTION: Because the CRA was passed in 1977, long before the subprime crisis, it couldn't have caused the recent explosion in bad loans.
Foreign Policy: If President Obama's non-war war in Libya makes no sense, blame his nutty security adviser "for multilateral affairs and human rights" — Samantha Power. It turns out Power was the main White House aide agitating for military force against Libyan strongman Moammar ...
You don't just walk up to the local bully and slap him across the face. If you are determined to confront him, then you try to knock the living daylights out of him. Otherwise, you are better off to leave him alone. Anyone who grew up in my old neighborhood in Harlem could have told you that. But ...
Commerce: Caterpillar's CEO warned Illinois last week that the state's anti-business climate is forcing the company to consider leaving. The Illinois governor's response? No way. What planet does he live on? The Pantagraph of Bloomington, Ill., reported last week that Caterpillar Chief ...
Libya: The new military policy the president advocated Monday in his overdue address is best described as "misadventurism." Equally as bad or worse, the commander in chief is being disingenuous with the public. During his presidential campaign, candidate Barack Obama famously said that when ...
Nuclear Power: The greatest danger at Fukushima was and is the spent fuel stored at the reactor sites. So why are we doing the same thing when we have a safe place to store it? Before a 9.0 axis-shifting earthquake damaged the nuclear reactors at Fukushima, Japan, legislation was introduced ...
Posted By: C400Pilot(910) on 3/30/2011 | 5:17 AM ET
cekrstks(50): "The banks prostituted themselves so that they could scale up and grow their businesses." This is what every business MUST do (grow, expand) else it stagnates and dies. That in our "Political economy" they must bend to the looters and political entrepreneurs is sick and obscene. The gist of the FCIC is that banks lowered their lending standards far too low. So, did they just magically decide that 1000 years of banking wisdom was worthless? Come on! Head out of r
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Posted By: Kauaicat(155) on 3/30/2011 | 5:16 AM ET
Left out is the complicity of Fannie Mae and Freddie Mac, mandated to have 56% of their loan portfolio in non-prime loans, providing the banks with an outlet to sell the non-prime loans they originated, yet keep the origination and processing fees. Add in FRE and FMA churning their portfolio by packaging and selling the non-prime loans to Wall Street, and it is no wonder the housing bubble occurred. In summary, no CRA or FRE/FMA mandate, no housing bubble.
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Posted By: Rosebud(255) on 3/30/2011 | 2:05 AM ET
cont. Barney Frank, Chris Dodd, Maxine Waters were the most vociferous defenders. When Raines left Fannie Mae, he took $90 mil bonus for himself & donated to their campaigns. Obama has been trying to pin this mess on Bush since he started campaigning. Bush is such a gentleman, he defended himself once on tv after hearings (Frank blaming Bush)claiming this mess started way before he came into office. What amazes me is that he has a relationship with Clinton who has worked with Bush I for
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Posted By: Rosebud(255) on 3/30/2011 | 1:57 AM ET
I read that Clinton reinstituted the CRA in '93, forced the FED to lower credit standards for "ninja" loans, pushed through HUD/Andrew Cuomo (affirmative action loans) into Fannie & Freddie. DiriObama himself was a "community organizer" for ACORN forcing banks under threat of lawsuit for the poor minorities on the southside of Chicago. His buddy Fannie CEO Franklin Raines, kept two sets of books & filled his coffers & dem congressmen who lied in hearings when
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Posted By: RSB(5) on 3/29/2011 | 9:35 PM ET
If you want to see how the Federal Reserve's bank examiners use the CRA to persuade banks to take bad loans, try searching "bank examiners camel score cra". If you are not lending enough in poor areas, you will take a hit on your bank score (1 to 5, highly confidential) and have trouble doing such things as mergers and acquisitions.
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