The Act, which Jimmy Carter signed in 1977, grew out of the complaint that urban banks were "redlining" inner-city neighborhoods, refusing to lend to their residents while using their deposits to finance suburban expansion. CRA decreed that banks have "an affirmative obligation" to meet the credit needs of the communities in which they are chartered, and that federal banking regulators should assess how well they do that when considering their requests to merge or to open branches. Implicit in the bill's rationale was a belief that CRA was needed to counter racial discrimination in lending, an assumption that later seemed to gain support from a widely publicized 1990 Federal Reserve Bank of Boston finding that blacks and Hispanics suffered higher mortgage-denial rates than whites, even at similar income levels.
A September 1999 study by Freddie Mac, for instance, confirmed what previous Federal Reserve and Federal Deposit Insurance Corporation studies had found: that African-Americans have disproportionate levels of credit problems, which explains why they have a harder time qualifying for mortgage money. As Freddie Mac found, blacks with incomes of $65,000 to $75,000 a year have on average worse credit records than whites making under $25,000.
The Federal Reserve Bank of Dallas had it right when it said —in a paper pointedly entitled "Red Lining or Red Herring?"— the CRA may not be needed in today's financial environment to ensure all segments of our economy enjoy access to credit." True, some household —those with a history of credit problems, for instance, or those buying homes in neighborhoods where re-selling them might be difficult— may not qualify for loans at all, and some may have to pay higher interest rates, in reflection of higher risk. But higher rates in such situations are balanced by lower house prices. This is not a conspiracy against the poor; it's how markets measure risk and work to make credit available.
The Clinton administration's get-tough regulatory regime mattered so crucially because bank deregulation had set off a wave of mega-mergers, including the acquisition of the Bank of America by NationsBank, BankBoston by Fleet Financial, and Bankers Trust by Deutsche Bank. Regulatory approval of such mergers depended, in part, on positive CRA ratings. "To avoid the possibility of a denied or delayed application," advises the NCRC in its deadpan tone, "lending institutions have an incentive to make formal agreements with community organizations." By intervening —even just threatening to intervene— in the CRA review process, left-wing nonprofit groups have been able to gain control over eye-popping pools of bank capital, which they in turn parcel out to individual low-income mortgage seekers. A radical group called ACORN Housing has a $760 million commitment from the Bank of New York; the Boston-based Neighborhood Assistance Corporation of America has a $3-billion agreement with the Bank of America; a coalition of groups headed by New Jersey Citizen Action has a five-year, $13-billion agreement with First Union Corporation. Similar deals operate in almost every major U.S. city. Observes Tom Callahnan, executive director of the Massachusetts Affordable Housing Alliance, which has $220 million in bank mortgage money to parcel out, "CRA is the backbone of everything we do."
he also joined Davis, Miner, Barnhill & Galland, a twelve-attorney law firm specializing in civil rights litigation and neighborhood economic development, where he was an associate from 1993 to 1996, then of counsel from 1996 to 2004, with his law license becoming inactive in 2002.
Obama was a founding member of the board of directors of Public Allies in 1992, resigning before his wife, Michelle, became the founding executive director of Public Allies Chicago in early 1993. He served from 1994 to 2002 on the board of directors of the Woods Fund of Chicago, which in 1985 had been the first foundation to fund the Developing Communities Project
Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/Insurance
Docket / Court 94 C 4094 ( N.D. Ill. ) FH-IL-0011
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 injunctive relief, actual damages, and punitive damages.
Barack H. Obama
Davis, Miner, Barnhill and Galland, P.C.
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: Thursday, September 30, 1999
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
Who is Randy Scheunemann?
He is the principal foreign policy adviser to John McCain and potential successor to Henry Kissinger and Zbigniew Brzezinski as national security adviser to the president of the United States.
But Randy Scheunemann has another identity, another role.
He is a dual loyalist, a foreign agent whose assignment is to get America committed to spilling the blood of her sons for client regimes who have made this moral mercenary a rich man.
From January 2007 to March 2008, the McCain campaign paid Scheunemann $70,000—pocket change compared to the $290,000 his Orion Strategies banked in those same 15 months from the Georgian regime of Mikheil Saakashvili.
What were Mikheil's marching orders to Tbilisi's man in Washington? Get Georgia a NATO war guarantee. Get America committed to fight Russia, if necessary, on behalf of Georgia.
Scheunemann came close to succeeding.
Had he done so, U.S. soldiers and Marines from Idaho and West Virginia would be killing Russians in the Caucasus, and dying to protect Scheunemannâ€™s client, who launched this idiotic war the night of Aug. 7. That people like Scheunemann hire themselves out to put American lives on the line for their clients is a classic corruption of American democracy.
U.S. backing for his campaign to retrieve his lost provinces is what Saakashvili paid Scheunemann to produce. But why should Americans fight Russians to force 70,000 South Ossetians back into the custody of a regime they detest? Why not let the South Ossetians decide their own future in free elections?
Not only is the folly of the Bush interventionist policy on display in the Caucasus, so, too, is its manifest incoherence.
Defense Secretary Robert Gates says we have sought for 45 years to stay out of a shooting war with Russia and we are not going to get into one now. President Bush assured us there will be no U.S. military response to the Russian move into Georgia.
That is a recognition of, and a bowing to, realityâ€”namely, that Russiaâ€™s control of South Ossetia and Abkhazia and occupation of a strip of Georgia cannot be a casus belli for the United States. We may deplore it, but it cannot justify war with Russia.
If that be true, and it transparently is, what are McCain, Barack Obama, Bush, and German Chancellor Angela Merkel doing committing the United States and Germany to bringing Georgia into NATO? For that would commit us to war for a cause we have already conceded, by our paralysis, does not justify a war.
Not only did Scheunemann's two-man lobbying firm receive $730,000 since 2001 to get Georgia a NATO war guarantee, he was paid by Romania and Latvia to do the same. And he succeeded.
Latvia, a tiny Baltic republic annexed by Joseph Stalin in June 1940 during his pact with Adolf Hitler, was set free at the end of the Cold War. Yet hundreds of thousands of Russians had been moved into Latvia by Stalin, and as Riga served as a base of the Baltic Sea fleet, many Russian naval officers retired there.
The children and grandchildren of these Russians are Latvian citizens. They are a cause of constant tension with ethnic Letts and of strife with Moscow, which has assumed the role of protector of Russians left behind in the "near abroad" when the Soviet Union broke apart.
Thanks to the lobbying of Scheunemann and friends, Latvia has been brought into NATO and given a U.S. war guarantee. If Russia intervenes to halt some nasty ethnic violence in Riga, the United States is committed to come in and drive the Russians out.