EDITORIAL: Housing shakedown - And ACORN is a master at it

Las Vegas Review-Journal ^ | Oct. 15, 2009 | Editor

[Nevadan]

The 1977 Community Reinvestment Act, enacted under President Jimmy Carter, was intended to end "redlining," a practice in which banks supposedly ruled off many inner-city neighborhoods on their maps, refusing to issue mortgages within their boundaries.

The immediate result was that -- to please regulators who have the power to shut down private banks -- bankers started reducing their financial standards, issuing loans to low-income or low-net-worth customers who might not previously have qualified.

These lowered standards led, in part, to the housing market meltdown.

But the Community Reinvestment Act did something a lot more troubling than that. It allowed third parties to challenge bank mergers, expansions or ownership changes by claiming the banks had not done enough to promote loans to inner-city residents.

A decade ago, Sen. Phil Gramm of Texas unsuccessfully tried to gut the law, describing nonprofits that use the law to leverage "donations" from banks as "protection rackets." Events have proved Sen. Gramm prophetic.

The community activist group ACORN -- where President Barack Obama used to teach classes in street activism, and whose Chicago membership played an important early role in his political campaigns -- is now in trouble over a number of matters. And now Republican lawmakers contend that the way ACORN uses its ability to punish or reward banks by testifying that they either do or don't "do enough" under the Community Redevelopment Act amounts to a shakedown racket.

ACORN says nearly all the money it receives from banks is used to provide advice to first-time home buyers or homeowners who are at risk of losing their homes to foreclosures, and that the money isn't used for political advocacy.

Bull. First, money is fungible. Using one pile of money for one purpose frees up funds for other purposes -- like endorsing and working for the election of Democratic candidates, which ACORN does. A lot.

But secondly, so what? If a bank robber claims he used all his loot to buy medicine for crippled children, is his robbery forgiven? Shakedown rackets are still illegal, and the federal government should not be serving as an enabler.

Archived ACORN testimony on the Federal Reserve Web site shows ACORN has spoken against bank mergers, contending that banks weren't living up to the CRA, The Associated Press reports. In at least one case, however, ACORN supported a merger. The group acknowledged in the 1998 testimony that it was unusual for it to do so, but it said one of the banks involved, NationsBank, was a leader in community reinvestment and that its partnership with ACORN Housing Corp. had produced at least $236 million in mortgages.

Ah. A "good" bank!

"Should we repeal CRA? Absolutely," says Rep. Jeb Hensarling, Texas Republican, a member of the House Financial Services Committee. "Do we have the votes for it today? I seriously doubt that."

Discriminating against would-be mortgage borrowers because of their race or national original is already illegal, as it should be. The Community Redevelopment Act is precisely the kind of excessive bureaucratic meddling in the supposedly "under-regulated" banking industry that led to last year's financial meltdown. It should indeed be repealed.

If Rep. Hensarling can't find enough votes to start cleaning out the stables, it's the job of the voters to send him those votes -- starting next year

[Nevadan]

This editorial is an example why Harry Reid hates the Las Vegas Review Journal so much. It tends to tell the truth!

[Doogle]

taught well by the street organizer

[SonOfDarkSkies]

Obama, ACORN, and Barney Fwank nearly destroyed the banking system and the housing industry...yet none is contrite or even slightly honest about his role.

If Obama doesn't somehow succeed at becoming a dictator, he (and his Buddy Barney) will IMO eventually be run out of town on a rail.

[DBrow]

“..yet none is contrite or even slightly honest about his role.”

They are not finished. When they are they’ll crow about it and write books about how they reformed an entire economy to achieve economic and social justice in an adversarial environment. If they yap now they will fail.

[Grampa Dave]

"The 1977 Community Reinvestment Act, enacted under President Jimmy Carter, was intended to end "redlining," a practice in which banks supposedly ruled off many inner-city neighborhoods on their maps, refusing to issue mortgages within their boundaries."

"The immediate result was that -- to please regulators who have the power to shut down private banks -- bankers started reducing their financial standards, issuing loans to low-income or low-net-worth customers who might not previously have qualified."

This is just another reason to agree with Lillian Carter:

Lillian Gordy Carter, who raised four kids during the Great Depression, once noted:

“Sometimes, when I look at my children, I wish I had remained a virgin.”

Lillian, millions of Americans wish that you had remained a virgin!

[Sender]

Bawney Fwank: a Man Date for Change.

[SuperSonic]

Bump! This needs more exposure.

[yoe]

Carter then Clinton told the banks to lend money to the indigent regardless of ability to pay back. The banks balked and then the feds told the banks not to worry, they would take the worthless mortgages off their hands and by the way, donate to ACORN.

The banks did just that and the feds did as they said they would by bundling up the worthless mortgages and selling them to unsuspecting folks in places like Prague, or Spain, or England......creating a Dam that could not hold back the enormous corruption of the Federal Government. The rest is history.......

[bvw]

National policies that encourage borrowing for anything are toxic. Even when offered to those well able to repay. Why?

(1) It means monetary disenfranchisement of the poor and those with poor credit standing. Because loaned money is now part of money money, and the poor can’t get at it, even should they be honest and work hard. Working hard at low pay still means one can’t borrow, because there’s no extra cash above basic living expenses.

(2) That monetary disenfranchisement creates a crass political enfranchisement. The longing and envy of those able to borrow creates a political franchise for their votes, when access to the loan pool is offered.

(3) The political franchise based on political forcing or access to loan pools is morally destabilizing to the national politic. It is ripe for and a breeding ground of corruption, thug politics, divisive politics — viz Barney Franks, Chris Dodd, Acorn, Fannie, Freddie, the corrupted banks and massive derivative portfolios of bad loans, etc etc

(4) The easy access to loans drives up prices of everything, and amplifies, fortifies and extents the effects of prior mentioned flaws.

(5) The easy access to money creates a corrupted sense of economic values and entitlement in all parts and all groups in the system.

(6) The interest payments and underwriting fees create a class of the wealthy who have little in real accomplishment. It pulls gifted people away from endeavors like medicine, manufacturing, retail, services and engineering, and into creating non things like derivatives and loan marketing and loan servicing programs.

[Major Matt Mason]

Repealing it at this time is probably a pipe dream, but rewriting it to take out the language allowing third parties to shakedown financial institutions is a no brainer. A GOP-controlled Congress should make this a priority, but I'm sure the wussy moderates will throw sand in the gears as they always do.

[Liz]

REFERENCE----JUSTICE DEPARTMENT COMPLAINT
January 7, 2009
IN RE: ASSOCIATION OF COMMUNITY ORGANIZATIONS FOR REFORM NOW

EXCERPT The undersigned State Board delegates and National Board members of the Association of Community Organizations for Reform Now (“ACORN”) file this criminal complaint against ACORN Staff and Executive Board members for fraud, embezzlement, conspiracy and concealment, and criminal civil rights violations. Additionally, since there has already been the public admission that a felony was committed, it is also possible that other federal offenses have also been committed including but not limited to;

Title 18 U.S.C. §1341, Mail Fraud;

18 U.S.C.§1001, Presenting a False Document to the an Agent of the United States Government;

18 U.S.C.§1027 False statements and concealment of facts in relation to documents required by the Employee Retirement Income Security Act of 1974 and other possible offenses including civil and/or criminal RICO violations;

18 U.S.C. §§1961-68 (RICO Act);

18 U.S.C. §1001 (False Statements to Agents of the U.S. Government);

18 U.S.C. §1341 (Mail Fraud),

18 U.S.C. §1027 (ERISA Violations), and,

18 U.S.C. §241(Conspiracy Against Civil Rights).

Finally, the complainants contend that full investigations of a RICO conspiracy under 18 U.S.C. §1962(c) are warranted because they assert that (1) the defendant persons (2) were employed by or associated with an enterprise (3) that engaged in or affected interstate commerceand that (4) the defendant persons operated or managed the enterprise (5) through a pattern (6) of racketeering activity, and (7) the complaints were injured in its business or property by reason of the pattern of racketeering activity. Thus, the complainants feel that a formal RICO investigation is also warranted.

--SNIP-- 24 pp complaint

SOURCE http://www.acorn-8.net/PDFs/USAttComp.pdf