If you thought the housing crisis and the resulting financial meltdown was yesterday’s news, think again. The very same policies that led to “the worst recession since the Great Depression” are still in place. Not only that, the Consumer Financial Protection Bureau created by that rotten FrankenDodd financial reform law doubles down on it.
Rush Limbaugh provides a brief history lesson for those who may have forgotten.
And then do you remember how Jimmy Carter and then Clinton and then, after that, Clinton came along and they passed something called the Community Reinvestment Act. And you remember what that did? The federal government forced banks to lend money to people who had no prayer of ever paying it back. Janet El Reno, the attorney general for Clinton, even threatened the big banks all over the country with investigations if they didn’t do this.
The Reverend Jackson was running around complaining about redlining, that people of color were not being given loans because of the racist policies of the banks. The American dream was defined as everybody should have a house, and the Democrats came along and said it’s not fair some people have houses and other people don’t. Well, we gotta put the people that don’t have houses in houses. Well, how do we do that if they can’t afford it? It’s simple. We make the banks loan them money at low-interest rates, and then the dirty little secret is they can’t pay it back, so it’s up to the banks. The banks are gonna eat it. That was the philosophy. The banks owed this because the banks had been screwing people for so long. (Read More)
We all know what happened from there. The banks “bundled” all of these bad loans and sold them off as derivatives and mortgage backed securities, all with the help of Fannie Mae and Freddie Mac. Then people started defaulting on the mortgages and the next thing you know we had a massive crisis that helped to propel Barack Obama into the White House. He promised to fix the economy and cut the national debt in half. Instead, the national debt has increased by 5 or 6 trillion and he’s doubling down on the policies that led to the crash in the first place.
Well, get ready because the whole thing is about to happen again.
Yes, believe it or not, the federal government is now starting another initiative to force banks to lend to low-credit-rated blacks and Hispanics — not just anybody but specifically blacks and Hispanics — and is threatening — and already imposing — huge punitive fines if they don’t. Moreover, this time they’re going even further. They’re going to take over thecredit rating agenciesand force them to change their standards to accommodate blacks and Hispanics so that nobody will have any idea who is a bad credit risk and who is not. In so many words, the government is about impose its will on the whole home-lending market and force another round of bad loans so that the banks are going to be looted once again so that even the federal government may not be able to bail them out this time.
The principle instrument this time is not the Justice Department, Fannie Mae and Freddie Mac, as it was last time, but the brand-new Consumer Finance Protection Bureau, designed by good old Elizabeth “Nobody-Ever-Made-It-On-Their-Own” Warren, which should really be called the Bureau for Bringing Down the Entire Economy. As reported in last Sunday’s New York Post by Hoover Institution Media Fellow Paul Sperry, the CFPB has just announced that it is adopting a 20-page “Policy Statement on Discrimination in Lending” issues by the Interagency Task force on Fair Lending in 1994 that kicked off Attorney General Janet Reno’s draconic enforcement of the Community Renewal Act. Part of the policy statement reads, “Applying different lending standards or offering different levels of assistance to applicants who are members of a protected [i.e., minority] class is permissible in some circumstances. Providing different treatment to applicants to address past discrimination would be permissible if done in response to a court order.” There are already plenty of court orders sitting around.
Just two weeks ago Wells Fargo caved to a Justice Department offensive and paid $175 million for alleged past discriminating against minority borrowers. All this occurred even though the bank received an “outstanding” grade in its most recent Community Reinvestment Act exam. The government did not even bother to prove discrimination in a single instance but relied instead on statistics showing lower rates of homeownership in minority neighborhoods.
Thomas Perez, the Justice Department honcho who is spearheading this campaign, says banks discriminate “with a smile” and “fine print” and are “every bit as destructive as the cross burned in a neighborhood.” Nice objective evaluation there.
November can’t come fast enough.
Update: Linked by Conservative Hideout – thanks!