Saturday, October 20, 2007

For looters, A is not A

Mitch, at Canada's John Galt, points out that it was Corporatism, practiced under bludgeoning from at the behest of a Clinton administration Assistant Attorney General for Civil Rights, that presaged the sub-prime mess. He "was responsible for bullying financial institutions into making loans to various preferred groups, regardless of credit history or proof of actual discrimination."

Mitch links to a story at Reason magazine with more detail:

...Chevy Chase Savings Bank was forced to cough up $140 million to African Americans by, for example, offering below- market- rate loans to minorities and placing ads in black- owned newspapers. Justice showed no evidence that Chevy Chase, the largest thrift in the D area, had denied loans to individuals because of their race. Rather, Chevy Chase hadn't opened new branches in predominantly black neighborhoods. The bank had been operating branches in African- American neighborhoods, but that didn't satisfy civil- rights enforcers: Either those branches had been acquired in a merger or the neighborhoods in which these branches operated had been predominantly white when the branches opened.

Two governors of the Federal Reserve System have criticized the proposed CRA regulations, saying financial institutions will make risky loans to women or racial minorities so that they can avoid discrimination lawsuits. Fed Governor Lawrence Lindsey considers the regulations a blatant power grab by political micromanagers in Congress and the White House. He has recently encouraged public comments, presumably critical, of the regulations. And Governor John LaWare told the Dow Jones News Service, "I feel very uneasy about the de facto allocation of credit and banking resources by administrative fiat."
Apparently, it's only predatory lending if the government didn't mandate it. Why not just take the money in the first place, and eliminate the time lag? Because that would be too blatant, like the first try at HillaryCare.

Mr. Lindsey and Governor LaWare anticipated the current problem, but who in the mortgage industry is speaking against today's looters? Where is the T. J. Rodgers of the mortgage industry when Deval Patrick (see below) and Jesse Jackson demagogue the issue today?

A comment at Mitch's site points out that the aforementioned US AAG was also a Board member of Ameriquest. From Wikipedia:
In 2004, he was appointed to the board of directors of the firm that controls Ameriquest, the mortgage company infamous for predatory lending scandals, because of his 20 years of fighting such problems. Ameriquest subsequently agreed to a $325 million dollar settlement regarding their predatory lending practices in 49 states.[10] After this success, [he] stepped down from the board on July 2, 2006.
Loot is where you find it, I guess. In this case in the PC PR needs of Ameriquest.

Oh, and the name of that Clinton administration Assistant Attorney General? Deval Patrick.

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