[* The series as it unfolds:
*]
In 1977, the laws regulating banking were forever changed by the addition of a little gem by the name of the Community Reinvestment Act.
You may recall my mention of the updated version of this law in February, in reference to this same topic.
But it's time to go back to its roots.
In its initial form, the CRA was an effort by lawmakers to make sure that "the whole community" could get its credit needs met by banks. It was overwhelmingly opposed by mainstream banking, and passed thanks to enormous lobbying pressure from organizations like the ACLU and ACORN.
Some of you may have heard that name.
The Association of Community Organizations for Reform Now has been - since its founding in 1970 - a massive lobbying house for so-called "housing reform," among the many other pies it has fingers in. It has engaged in practices often seen as questionable, and currently stands accused of fairly substantial voter fraud.
But primarily, the CRA was a weak piece of legislation at the time. It was designed to force banks to extend home loans to low and "moderate" income neighborhoods; it was a big deal, if a bit toothless, and even the EPA got in on the action. The real reason the CRA was basically toothless, however, was not for lack of trying on the part of ACORN and the ACLU; it was because at that time, the banks were not allowed to collect racial data on buyers.
That all changed in 1988. The ACLU and ACORN managed to convince the House and Senate to get plastered enough to amend the Home Mortgage Disclosure Act to not only allow, but REQUIRE, banks to collect racial data on buyers.
The facts came out: lots of poor people are also black.
I know, crazy.
At any rate, the ACLU and ACORN seized upon this dearth of minority home buyers as evidence of bank malfeasance, rather than evidence that people can be too poor to get loans, (WARNING: annoying, slow .pdf,) and immediately started lobbying for "improvements" to the CRA. (This claim was later proven to be false; when the outright lies in the sample data were discovered and eliminated, minority lending was found to be at the same rate as whites.)
Under President Clinton, they got what they'd asked for. In the 1990's, the revised Community Reinvestment Act not only required banks to "provide credit services to their entire communities," as per the original bill, but based the estimation of their compliance with the CRA on the banks' ratings - with ACORN and the ACLU. In fact, ACORN created a lending program across 11 cities to create new loans under CRA in 1993.
Those "improvements" set the stage for disaster. At the time, they made it look good on paper; minority home ownership grew massively during the Clinton years, thanks in part to CRA, and in part to President Clinton's direct push for vastly increased subprime lending; President Clinton helped this along by installing his former advisers (James Johnson, followed by former Budget Director Franklin Raines as CEOs at FNMA,) at the very organizations responsible for backing many of the subprime loans demanded by ACORN under the revamped CRA.
The top priority may be to ask more of Fannie Mae and Freddie Mac. The two companies are now required to devote 42% of their portfolios to loans for low- and moderate-income borrowers; HUD, which has the authority to set the targets, is poised to propose an increase this summer. Although Fannie Mae actually has exceeded its target since 1994, it is resisting any hike. It argues that a higher target would only produce more loan defaults by pressuring banks to accept unsafe borrowers. HUD says Fannie Mae is resisting more low-income loans because they are less profitable.And as the pressure grew on FNMA and FHLMC, their portfolios began to expand.
That leads into the next part of the series, which means instead of carrying that any farther, it's time to talk about ACORN and Senator Barack Obama - and some more about FNMA, but in different context. Did you know that Franklin Raines, former Budget Director under President Clinton, investigated for fraud while CEO of FNMA, is now one of Senator Obama's campaign advisors? Now you do. This same gentleman, Raines, was also responsible for the downfall of Countrywide Financial, as well.
A company praised - by FNMA - as a "paragon of non-discriminatory lending."
And, of course, there's always the top four recipients of campaign contributions from FNMA and FHLMC: Senator Chris Dodd, Senate Banking Committee Chairman; Senator John Kerry, former Democratic Presidential candidate; Senator Hillary Rodham Clinton; and Senator Barack Obama.
So, what about Senator Obama's connections to ACORN?
Well, specifically, Senator Obama served as legal counsel for ACORN's lobbying team in the 1990's; the same lobbying team that got the CRA amended.
He has taken huge donations from them; he has - as a board member of a supposedly non-partisan charitable organization - given them huge grants; they have committed voter fraud on his behalf, and openly endorsed his campaign.
THIS is the "community organizing" that Senator Obama loudly touts as his experience for the Presidency; working to undermine the U.S. housing market. He even teaches an ACORN training seminar annually.
I will, again, give him the benefit of the doubt and say it wasn't done deliberately.
But he not only worked for the organization that revamped CRA to force banks to extend loans to the non-creditworthy; he has also installed a known criminal - specifically, the known criminal directly responsible for the FNMA bailout - as his campaign's finance advisor.
The back, it doth not scratch itself.
But Senators Obama and Dodd, and ACORN sure are scratching each others', now, aren't they?
U.S. House Of Representatives Member Directory By State
U.S. Senate Member Directory By State
And while I'm at it, the president's email address - I hope he gets a ton of viagra ads - is president@whitehouse.gov, and the Veep is vice_president@whitehouse.gov - so use them wisely and OFTEN. *]
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