***After Citi (bank, corp, group or whatever it was at the time) was sued by Obama for not giving loans to low-income folks, I imagine they had got a bit gun-shy on refusing loans. (So send them all to jail!)***
I don’t know if 0bama was directly related to forcing banks to give such loans, but I’ll be glad to hear if you have any citations about it. But, I DO know that Jimmah Carter started it all with a law that imposed LARGE FINES on the banks for refusing to grant mortgages to people who could not repay them. Then Clinton made it much stiffer and with even larger fines. Some of the people at the banks were innocent. The greed came later. And the greed was big time.
I had only read about it on FR threads, so I had to do some more research myself. Here was a good one that I found. As an aside, I imagine that with more and more banks not able to make money in their more traditional way (loaning money out at a fair interest rate) they pushed gov’t to allow them to enter into the more risky trading markets using derivivatives to make up for the loss in interest revenue.
“I’ve been fighting alongside ACORN on issues you care about my entire career. Even before I was an elected official, when I ran Project Vote voter registration drive in Illinois, ACORN was smack dab in the middle of it, and we appreciate your work.” — Barack Obama, Speech to ACORN, November 2007
Do you remember how we told you that the Democrats and groups associated with them leaned on banks and even sued to get them to make bad loans by abusing the Community Reinvestment Act....
In these lawsuits, ACORN makes a bogus claim of Redlining (denying poor people loans because of their ethnic heritage). They protest and get the local media to raise a big stink. This stink means that the bank faces thousands of people closing their accounts and get local politicians to lobby to stop the bank from doing some future business, expansions and mergers. If the bank goes to court, they will win, but the damage is already done because who is going to launch a big campaign to get the bank’s reputation back?
It is important to understand the nature of these lawsuits and what their purpose is. ACORN filed, or threatened to file, tons of these lawsuits and ALL CRA suits allege racism (usually the press involved and such with the threat of the CRA lawsuit is enough to get the bank to give in and put them in a catch 22, they also had a willing Janet Reno Justice Department to work with - see below for more on Reno).As we have said in our series or articles analyzing every aspect of this story (links at the very bottom of this post), the series of ACORN harassment lawsuits and intimidation against banks to lower credit standards was not the sole reason for the mortgage crisis, it was one important layer of many that brought us to the mortgage crisis and the largest financial scandal in the history of the world.
Case Name
Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/Insurance
Docket / Court 94 C 4094 ( N.D. Ill. ) FH-IL-0011
State/Territory Illinois
Case Summary
Plaintiffs filed their class action lawsuit on July 6, 1994, alleging that Citibank had engaged in redlining practices in the Chicago metropolitan area in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691; the Fair Housing Act, 42 U.S.C. 3601-3619; the Thirteenth Amendment to the U.S. Constitution; and 42 U.S.C. 1981, 1982. Plaintiffs alleged that the Defendant-bank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories. Plaintiffs sought injunctiverelief, actual damages, and punitive damages.
U.S. District Court Judge Ruben Castillo certified the Plaintiffs’ suit as a class action on June 30, 1995. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 322 (N.D. Ill. 1995). Also on June 30, Judge Castillo granted Plaintiffs’ motion to compel discovery of a sample of Defendant-bank’s loan application files. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 338 (N.D. Ill. 1995).
The parties voluntarily dismissed the case on May 12, 1998, pursuant to a settlement agreement.
Plaintiff’s Lawyers Alexis, Hilary I. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Childers, Michael Allen (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Clayton, Fay (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Cummings, Jeffrey Irvine (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Love, Sara Norris (Virginia)
FH-IL-0011-9000
Miner, Judson Hirsch (Illinois)
FH-IL-0011-7500 | FH-IL-0011-9000
Obama, Barack H. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Wickert, John Henry (Illinois)
FH-IL-0011-9000
UPDATE:Hotair.com comments on this story HERE.
New York Post Article HERE:
THE seeds of today’s financial meltdown lie in the Community Reinvestment Act - a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades.
CRA was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now) to abuse the law by forcing banks to make hundreds of millions of dollars in “subprime” loans to often uncreditworthy poor and minority customers.
Any bank that wants to expand or merge with another has to show it has complied with CRA - and approval can be held up by complaints filed by groups like ACORN.
In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America’s financial institutions.
The Woods Fund report makes it clear Obama was fully aware of the intimidation tactics used by ACORN’s Madeline Talbott in her pioneering efforts to force banks to suspend their usual credit standards.Yet he supported Talbott in every conceivable way. He trained her personal staff and other aspiring ACORN leaders, he consulted with her extensively, and he arranged a major boost in foundation funding for her efforts.
And, as the leader of another charity, the Chicago Annenberg Challenge, Obama channeled morefunding Talbott’sway - ostensibly for education projects but surely supportive of ACORN’s overall efforts.