ACORN And CRA Flow DownHill (Plumbers Know This)

Progressives, despite their deceptive name, want to look backwards, which is why, when you have a real question about one of their half- baked and failing policies, they love to point out former President Bush ( don’t they know he hasn’t been around for eight months?).  So I guess it is in keeping with their character to go back to the past for ideas that didn’t work then, and rework them into ideas that won’t work now.

At least, in this aspect, they are consistent.

As we try to shake off the financial crisis, here’s a bright idea. Take a law that has led to the writing of an enormous amount of bad mortgages and expand it. Then take enforcement away from bank examiners and give it to housing activists.

Sound like a poisonous cocktail? Well, it is what the Obama administration and Democrats are currently stirring up onCapitol Hill.

The White House and Congress want to expand a 30-year-old law–the Community Reinvestment Act–that helped to fuel the mortgage meltdown. What the CRA does, in effect, is compel banks to seek the permission of community activists to get regulatory approval for bank expansions and mergers. Often this means striking a deal with activist groups such as ACORN or unions like the Service Employees International Union (SEIU) and agreeing to allocate credit to poor and minority areas that are underserved.

In short, the CRA encourages banks to make loans they would not ordinarily make. What’s more, these agreements often require that banks offer no-money-down mortgages and remove caps on how much debt a borrower can take on. All of this is done in the name of “financial democracy.”

Liberals pooh-pooh the idea that a 30-year-old law could have contributed to the current subprime crisis and credit crunch. But what they ignore is the massive expansion of CRA-commitments forced on banks in the run-up to the 2008 financial crisis.


This is stupidity on a truly mind boggling scale. These are the people you want to represent you? 

According to the National Community Reinvestment Coalition, in the first 20 years of the act, up to 1997, commitments totaled approximately $200 billion. But from 1997 to 2007, commitments exploded to more than $4.2 trillion. (Keep in mind this is more than four times the size of the current health bill being debated in Congress.) The burdens on individual banks can be enormous. Washington Mutual, for example, pledged $1 trillion in mortgages to those with credit histories that “fall outside typical credit, income or debt constraints,” and was awarded the 2003 CRA Community Impact Award for its Community Access program. Four years later it was taken over by the Office of Thrift Supervision.

And some liberals still maintain that the CRA had nothing to do with the mortgage meltdown. Yeah, right- only if you hold your hands over your ears and yell, “La, La, La-” at the top of your lungs.

And then to compound the situation, ACORN, the “community organizing” group that used the CRA to crowbar favorable mortgages from reluctant banks, thus contributing to the mortgage meltdown find themselves under investigation.  They were largely untouched by the myriad scandals because they had patronage in Congress, and indeed the WH. Now they have found that there are limits to what even they can get away with.

Let the investigations begin, and spare no one- scorched earth policy should apply here.

Louisiana’s attorney general has broadened the scope of an investigation of ACORN to include a possible embezzlement of $5 million a decade ago within the community organization, five times more than previously reported.

ACORN Chief Executive Officer Bertha Lewis said the new reported amount is “completely false.”

Attorney General Buddy Caldwell has been conducting an investigation of ACORN since June. He issued subpoenas in August seeking documents related to former ACORN International President Wade Rathke and his brother Dale Rathke, who kept the group’s books. Those subpoenas were focused on possible ACORN violations for non-payment of employee withholding taxes, obstructing justice and violating the Employee Retirement Security Act. No charges have been made.

The attorney general had inquired in June into an alleged embezzlement within ACORN that happened 10 years ago. The group last year dealt with an internal dispute and a lawsuit involving accusations that Dale Rathke made nearly $1 million in improper credit card charges in 1999 and 2000. The brother and a donor repaid the money.

Yes, New Orleans would be a great place to begin- after all, it is the home base of ACORN, and her sister agency (although you might think there could be the teeniest bit of “conflict of interest”) SEIU, the union that is as close to Nobama as the warts on his backside. This could get real ugly, because there are so many pols in Washington who are tangled in ACORN’S web, and a true and thorough investigation will flush them out like the roaches they are.

Caldwell said last month that the statute of limitations presented obstacles to prosecutors taking action on the embezzlement, and that his investigation was not focused on that issue. Thesubpoena issued Monday changed the tone of the investigation and put a new emphasis on the embezzlement issue.

“Current high-ranking members of ACORN have publicly acknowledged that embezzlement did in fact occur, but the exact amount of the embezzlement was unknown until it was recently acknowledged in a board of directors meeting on Oct. 17, 2008, by Bertha Lewis and Liz Wolf that an internal review had determined that the amount embezzled was $5 million, ” the new subpoena says.

The subpoena says, “It is still unclear if some of the monies embezzled are from state, federal or private funds.”

The subpoena requests documents from Citizens Consulting Inc., a financial arm of ACORN, and from various accounting and legal consultants in New Orleans. Investigators are trying to verify the issues raised in the subpoena.

“We’re going to follow the evidence where it leads us and try to do the right thing,” said David Caldwell, head of the attorney general’s public corruption and special prosecutions divisions. “We are actively investigating the case, whatever the outcome might be. This is something we are devoting our full attention to.”

Wade Rathke, who was in Bangkok, Thailand, on Monday, referred questions to ACORN officials. Lewis said she would comment further after she and ACORN attorneys had a chance to review the subpoena.

It’s convenient that Wade Rathke is in Thailand- taking a vacation in the land of underage prostitution? We may never know, but he is beyond reach of a subpoena at the moment. We need to grab Dale, his brother, and squeeze him dry in front of a Grand Jury- but would he lie? I think he would- which leads us back to Deep Throat’s famous words- “Follow the money.”

That may well be our best course- because the money trail will tell us the truth.

The other players, probably not so much.


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9 Responses to “ACORN And CRA Flow DownHill (Plumbers Know This)”

  1. Adam says:

    The Philly Fed does not agree with you on CRA as a cause. Blaming CRA is just a way to blame progressives for the crisis and in turn also blame minorities.


    These studies found that lending to lower-income individuals and communities has been nearly as profitable and performed similarly to other types of lending done by CRA-covered institutions. Thus, the long-term evidence shows that the CRA has not pushed banks into extending loans that perform out of line with their traditional businesses.

    This is how the author of the Forbes article you cite is flat out wrong when he suggests CRA caused other banks to lend poorly. Wrong.

    But the author is a man who wrote a book called: “Why conservatives work harder, feel happier, have closer families, take fewer drugs, give more generously, value honesty more, are less materialistic and envious, whine less … and even hug their children more than liberals.”

    Oh yes, he’s not biased against progressive policy like the CRA at all…

    • Blake says:

      Oh yes- the Fed- another liberal construct, run by liberals- but it is true that it wouldn’t have been the CRA WITHOUT the ACORN that did the damage it did. It took ACORN to extort the revised policies that liberals favored, ergo, it is the liberals that actually caused this massive failure.

      • Adam says:

        You don’t even know what you’re talking about now and it’s clear. It is a lie to blame CRA and all studies show this.

        • Blake says:

          The CRA was the beginning, ACORN was the enabler, and poor people paid the price. That is the truth. I don’t know what I am talking about? You are truly insane if you believe that.
          Wake up and smell the bullsh*t coming from the liberals.

        • Big Dog says:

          Typical strawman. Claim that Blake blamed the CRA and then attack that argument. The article said that the CRA was partly to blame, a claim that we have been making all along.

  2. Adam says:

    And you obviously know nothing about the Fed if you so easily write it off as just some “liberal contruct, run by liberal.”

    The Fed knows what it’s talking about. The data to support the CRA’s fault in the crisis is just not there and I challenge you to find actual economists (not political hacks) blaming the CRA the way that the Forbes article does.

    • Big Dog says:

      The CRA was part of the problem that led to the economic problems faced in this country. Was it the sole issue, no but it was not blameless either.

      I am tired of pundits claiming that those who attribute some of this to the CRA are racists or blaming minorities. The CRA was one part (and not an insignificant part) of the problem. We can blame bankers who were greedy and we can blame others in the system but the Act forced banks to lend to people who were not credit worthy which, coupled with all the other things, caused the problem. Ultimately, the people who borrowed money they could not afford to pay back have as much to do with the crisis as anything else. Personal responsibility.

      Yes, people borrowed money they could not pay back and they were allowed to do so under the CRA. ACORN and others protested and fought to get these easy “liar loans” and that is part of the problem.

      It all ties together and though one cannot say it was all the fault of the CRA one cannot claim the CRA had nothing to do with it.

    • Blake says:

      The fed knows what its talking about?
      Don’t make me laugh- the NY Fed was run by the tax cheat Geithner, and is now run by a union goon- Puhlease!!!
      Your blind defense of all the above just has to make me ask you the question- were you one of the people in Nobama’s staff who handed out the white coats for all the doctors on the West Lawn yesterday? What a photo (phony) op.

    • Blake says:

      I find it absurd that you dismiss ANYONE who writes for Forbes magazine as a “political hack”- by that I guess that you need someone more “liberal” in order to believe?