New Orleans With the Office of the Comptroller of the Currency leading the way to gut the Community Reinvestment Act along with some other federal regulators, the last thing we should be doing is having to remind everyone, including the government and its legions of politicians, about the importance of stopping redlining of neighborhoods based on race, ethnicity, and income. Yet, we are again forced to defend irresponsible and biased deflections from the rich, conservatives, and Wall Street as they attack fair lending standards for families seeking home ownership. So here we go again, with feeling!
Michael Bloomberg in 2008 trying to finger the poor and minorities for the financial crisis is the equivalent of George H. Bush being mystified at the changes at the grocery store checkout counter when he was running. What did Bush know about buying his own groceries? Nothing. Similarly, what does Michael Bloomberg, the newly minted Democrat, worth sixty billion dollars, living in luxury in Manhattan, know about what it might be like to try and get a loan in a regular neighborhood with a regular family wage, especially if black, yellow, or brown? A thousand times nothing!
Most of the baloney about redlining driving the Great Recession has come from Wall Street, the securitizers, brokers, and the banking enablers looking to blame someone – anyone! – else for their fast buck, high risk greed and foolishness. It’s not a surprise that Bloomberg sucked up that stuff, hanging around with his buddies in New York City, rather than hearing the tears and seeing the pain of families losing their homes and savings on the streets.
Robert Kuttner, writing in the Washington Post, was working at the Senate Banking Committee during 1975 when the Home Mortgage Disclosure Act was passed and 1977 when CRA was passed and therefore there at the birthing. He points out clearly that embedded in the Act was the requirement that banks only make loans “‘consistent with the safe and sound operation of such institutions,’ which is to say with responsible lending standards.” Senator Elizabeth Warren has been clear about where the responsibility lies as well. She was quoted in the New York Times saying, “The end of redlining didn’t cause the 2008 crash. Out-of-control greed by Wall Street and big banks, and the corruption that lets them control our government, caused the crash. Predatory lenders steered families of color into the worst loans and those families lost billions.” Kuttner also points out correctly that most of the abuses, such as the ones pointed out by Warren, also came from financial institutions that were not covered by the Community Reinvestment Act, so hardly felt “pressured,” as Bloomberg argues, to make the loans.
We need a stronger Community Reinvestment Act with broader coverage, fewer loopholes, encompassing more institutions. We don’t need potshots at the CRA being fired off by folks looking to blame people, rather than force institutions to take responsibility and be accountable. I’m tired of politicians, their enablers, and money men blaming us for their mistakes.
Please enjoy 1. Sam Doores – Other Side of Town.
Thanks to WAMF.