July 11, 2011
Obama Regime Imposing the Same Race-Based Loans That Brought On 2008 Collapse
Posted by Dave Blount at July 11, 2011 9:09 AM
It took a collapse of the housing market that brought the entire economy down with it, but at least we learned our lesson when it comes to forcing banks to make bad loans on the basis of race — or did we? The madness inflicted by the Community Reinvestment Act is now enforced by gunrunning terrorist supporter Eric Holder's Department of Social Justice:
In what could be a repeat of the easy-lending cycle that led to the housing crisis, the Justice Department has asked several banks to relax their mortgage underwriting standards and approve loans for minorities with poor credit as part of a new crackdown on alleged discrimination, according to court documents reviewed by IBD.
Prosecutions have already generated more than $20 million in loan set-asides and other subsidies from banks that have settled out of court rather than battle the federal government and risk being branded racist. An additional 60 banks are under investigation, a DOJ spokeswoman says.
Settlements include setting aside prime-rate mortgages for low-income blacks and Hispanics with blemished credit and even counting "public assistance" as valid income in mortgage applications.
Here's an example of the authoritarian outrages perpetrated by our banana republic rulers:
[T]he government has ordered Midwest BankCentre to set aside almost $1 million in "special financing" for residents living in predominantly black areas of St. Louis. The program includes originating conventional home loans at fixed prime rates for African-American borrowers "who would ordinarily not qualify for such rates for reasons including the lack of required credit quality, income or down payment."
No country that permits such ham-fisted thuggery to be inflicted by the federal government deserves to call itself free.
We've been down this road before:
[I]ndustry analysts fear Attorney General Eric Holder is rekindling an anti-bank witch hunt launched by Attorney General Janet Reno in the 1990s, when Holder served as her deputy.
Some blame that in part for the subprime boom, because banks were ordered to throw open their lending windows to credit-poor minorities. That crackdown spurred the American Bankers Association to distribute to its thousands of members "fair-lending tool kits" advising the adoption of more permissive underwriting criteria to help inoculate them from prosecution.
Anyone who lived through 2008 knows where that led.
With the projection so typical of leftists, our rulers justify their race-based bullying by denouncing banks as racist. Since there is no evidence for this, they rely on theories.
One such theory — "disparate impact" — holds that merely a difference in loan application outcomes is enough to prove racial discrimination — even if no intent exists on the part of loan officers to contrast based on the color of applicants, and even legitimate business factors — such as credit scores and down payments — help explain disparities in loan outcomes between white and black applicants.
Under this broad theory, banks have been accused of racism simply for failing to open branches or aggressively market mortgages in black neighborhoods — regardless of the demand for, or viability of, such loans in those areas.
Following this theory, the government has ordered several banks to advertise in black media and open branches in black neighborhoods, despite the weak economy.
Obviously it is not possible for an economy to thrive under the heel of lunatics, which is why people in other countries run by the likes of Obama and Holder are characterized by extreme poverty — as ours will be soon if we don't get these vermin out of power.
Civil Rights Division chief Thomas Perez is another prime example of the sort of Marxist ideologue overseeing our transition to an impoverished socialist tyranny. Like Holder, he is a protégé of Janet Reno, who is best remembered for her bizarre Satanic child abuse witch hunts that destroyed people's lives; sending a child back to a communist dictatorship that his mother died helping him escape; and of course barbecuing 74 men, women, and children at Waco. Perez, who compares bankers to Klansmen,
has required bank defendants to earmark potentially millions in funding for inner-city community organizers — who must be approved by Justice. Critics say lenders are being forced to bankroll Acorn clones that often exist just to shake them down for risky loans.
Lest bankers think they can escape punishment merely by obeying the government's insane decrees,
Perez is also prosecuting banks for "reverse redlining through the targeting of minority communities for predatory loans."
That is, banks will be punished for making loans to unqualified blacks, as well as for not making loans to unqualified blacks. Capitalists can't expect to enjoy the transition to Marxist tyranny.
On a tip from JoeS. Hat tip: American Thinker.