ACORN discussion - can we move this into one thread?

[kg_veteran]

Originally Posted by Mavdog

again, you are mistaken. the work of acorn was for banks to give loans, not to give loans to anybody regardless of their ability to pay those loans.

show me where acorn forced any bank to make a loan to a borrower who should not have qualified....

This is an easy blanket statement for you to make, because you know that it is difficult to do.

What we can do, however, is apply common sense. We know that ACORN threatened litigation against banks that wouldn't lend to lower income borrowers. Now, if these loans were so profitable and banks knew that they could make more money making them (as you assert), then why would ACORN need to threaten litigation? If what you suggest were entirely true, it doesn't seem that any coercion would have been required.

I'm not saying that greed by the banks can be taken entirely out of the equation, but it seems illogical that you'd have to coerce a bank into lending practices that were more profitable.

[kg_veteran]

Originally Posted by kg_veteran

This is an easy blanket statement for you to make, because you know that it is difficult to do.

What we can do, however, is apply common sense. We know that ACORN threatened litigation against banks that wouldn't lend to lower income borrowers. Now, if these loans were so profitable and banks knew that they could make more money making them (as you assert), then why would ACORN need to threaten litigation? If what you suggest were entirely true, it doesn't seem that any coercion would have been required.

I'm not saying that greed by the banks can be taken entirely out of the equation, but it seems illogical that you'd have to coerce a bank into lending practices that were more profitable.

*bump*

[Mavdog]

Originally Posted by kg_veteran

This is an easy blanket statement for you to make, because you know that it is difficult to do.

What we can do, however, is apply common sense. We know that ACORN threatened litigation against banks that wouldn't lend to lower income borrowers. Now, if these loans were so profitable and banks knew that they could make more money making them (as you assert), then why would ACORN need to threaten litigation? If what you suggest were entirely true, it doesn't seem that any coercion would have been required.

I'm not saying that greed by the banks can be taken entirely out of the equation, but it seems illogical that you'd have to coerce a bank into lending practices that were more profitable.

I'm sure that there is no need to explain to you what redlining is....

acorn threstened banks that would not lend in inner city areas, which were predominate minority areas. there is a connection that these areas had lower income residents. these instances of redlining were based on pure discrimination.

did acorn threaten lawsuits if the bank would not lend to unquaified borrowers? that is the argument that you appear to make, and it is not supported by any facts. if you could produce any backup to support your assertion, let's see it.

the point that I have made is the lenders became more aggressive in making sub-prime and alt-a mortgages, both to minority and non-minority borrowers, in low income areas and non-low income areas, as they saw the profit margins involved. that is why so many lenders made these loans, these lenders did not make these loans due to pressure from acorn. sub-prime and alt-a mortgages were made in a variety of areas and to a variety of borrowers, borrowers who were low, middle and upper incomes. these designations have to do with credit, not with income strata.

[kg_veteran]

Originally Posted by Mavdog

I'm sure that there is no need to explain to you what redlining is....

acorn threstened banks that would not lend in inner city areas, which were predominate minority areas. there is a connection that these areas had lower income residents. these instances of redlining were based on pure discrimination.

Actually, redlining was a term that was coined in the Chicago area and referred to banks that would lend to low income whites but not middle income minorities. In other words, there was clear racial discrimination involved because they would lend money to a less qualified white borrower.

That's not what I'm talking about here. I'm talking about, as Stanley Kurtz put it, "ACORN’s campaign to intimidate banks into making high-risk loans to low-credit customers." From Kurtz:

Using provisions of a 1977 law called the Community Reinvestment Act (CRA), Chicago ACORN was able to delay and halt the efforts of banks to merge or expand until they had agreed to lower their credit standards. link

did acorn threaten lawsuits if the bank would not lend to unquaified borrowers? that is the argument that you appear to make, and it is not supported by any facts. if you could produce any backup to support your assertion, let's see it.

See above. Also, see the following quotes from City Journal:

Then came the Community Reinvestment Act. Passed in 1977 to prompt banks to lend money in underserved communities, the CRA allowed community groups to file complaints that could hold up or even scuttle bank mergers. As one nonprofit umbrella group observed: "To avoid the possibility of a denied or delayed application, lending institutions have an incentive to make formal agreements with community organizations."


Acorn became among the most successful at exploiting the law, especially after the Clinton administration set up tough new CRA standards. In 1993 Acorn crafted a $55 million, 11-city lending program administered by it and financed by 14 major banks eager to avoid CRA woes. In 1998 Acorn activists disrupted Federal Reserve hearings on the proposed Citicorp merger with Travelers, waving red umbrellas, a corporate symbol of Travelers, and then later protested Citigroup's acquisition of Associates First Capital Corp. Eventually Citigroup signed an agreement to provide mortgages through Acorn counseling centers, including home loans to undocumented aliens in California. In 2000 a U.S. Senate subcommittee estimated that such CRA deals had directed at least $9.5 billion through nonprofits, making the CRA the second-most important funder of social advocacy groups next to the government itself. link

But if the CRA is now unnecessary, ACORN has found a use for it beyond wielding it as a propaganda tool to suggest that “redlining” still exists. ACORN has developed a lucrative niche as an “advisor” to banks seeking regulatory approvals. Thus we have J. P. Morgan & Company, the legatee of the man who once symbolized for many all that was supposedly evil about American capitalism, suddenly donating hundreds of thousands of dollars to ACORN. This act of generosity and civic-mindedness came, interestingly, just as Morgan was asking bank regulators for approval of a merger with Chase Manhattan. Not to be outdone, Chase also decided to grant more than $200,000 to ACORN. link

So, yeah, I think the evidence shows that they extorted banks into both lowering their credit standards and paying them cash not to create legal problems for them related to proposed mergers.

the point that I have made is the lenders became more aggressive in making sub-prime and alt-a mortgages, both to minority and non-minority borrowers, in low income areas and non-low income areas, as they saw the profit margins involved. that is why so many lenders made these loans, these lenders did not make these loans due to pressure from acorn. sub-prime and alt-a mortgages were made in a variety of areas and to a variety of borrowers, borrowers who were low, middle and upper incomes. these designations have to do with credit, not with income strata.

Respectfully, I disagree. As I noted above, you can't remove greed from it entirely, but there were legitimate, non-discriminatory reasons that the banks had their credit standards set at a certain level, and they were, in fact, pressured/blackmailed by ACORN into lowering those standards.

Banks are in the business of making money. If the "sub-prime and alt-a" mortgages were so profitable, I find it hard to believe that anyone would have had to pressure them at all.

[Mavdog]

Originally Posted by kg_veteran

Actually, redlining was a term that was coined in the Chicago area and referred to banks that would lend to low income whites but not middle income minorities. In other words, there was clear racial discrimination involved because they would lend money to a less qualified white borrower.

yes, redlining is discriminatory.

That's not what I'm talking about here. I'm talking about, as Stanley Kurtz put it, "ACORN’s campaign to intimidate banks into making high-risk loans to low-credit customers." From Kurtz:

there is nothing, absolutely nothing, in the cra that mandates that banks lend to unqualified borrowers. the act establishes incentives for banks to set up branches and to make loans in areas that are determined to be underserved. it was a result of the prevalent redlining that existed prior to its enactment.

See above. Also, see the following quotes from City Journal:

still no evidence that the cra mandated banks to make loans to unquaified borrowers.

unless, of course, your position is that all minority and all lower income borrowers are unqualified?

well, are you?

So, yeah, I think the evidence shows that they extorted banks into both lowering their credit standards and paying them cash not to create legal problems for them related to proposed mergers.

no, the evidence you provide shows that acorn "intimidated banks" into making more loans to minority and lower income borrowers.

again, are all minority and lower income borrowers unqualified?

Respectfully, I disagree. As I noted above, you can't remove greed from it entirely, but there were legitimate, non-discriminatory reasons that the banks had their credit standards set at a certain level, and they were, in fact, pressured/blackmailed by ACORN into lowering those standards.

Banks are in the business of making money. If the "sub-prime and alt-a" mortgages were so profitable, I find it hard to believe that anyone would have had to pressure them at all.

there was no readjustment of any lending standards which the banks themselves did not set. if a borrower could not qualify for a loan there is nothing in the cra that says the bank should make that loan.

acorn did not pressure the banks to lower the standards, they pressured the banks to make loans to borrowers who were previously denied the opportunity to borrow. it was up to the lender to determine if the borrower was qualified or not.

[kg_veteran]

Originally Posted by Mavdog

there is nothing, absolutely nothing, in the cra that mandates that banks lend to unqualified borrowers.

I never said that, and you know it.

You said, "did acorn threaten lawsuits if the bank would not lend to unquaified borrowers? that is the argument that you appear to make, and it is not supported by any facts. if you could produce any backup to support your assertion, let's see it."

In response, I produced the various quotes and links above demonstrating that ACORN threatened to file regulatory complaints against banks that would have effectively delayed attempts by those banks to merge or expand unless those banks would comply with ACORN's demands to reduce their credit standards and/or pay them consulting fees.

still no evidence that the cra mandated banks to make loans to unquaified borrowers.

Which, of course, is not what I said.

unless, of course, your position is that all minority and all lower income borrowers are unqualified?

well, are you?

No, my position is that ACORN pressured banks into lower their credit standards by threatening to file regulatory complaints using provisions of the CRA, as demonstrated by the links and quotes I provided.

no, the evidence you provide shows that acorn "intimidated banks" into making more loans to minority and lower income borrowers.

Actually, it shows that ACORN intimidated banks into reducing their credit standards, thereby making loans to borrowers who otherwise would have been unqualified.

acorn did not pressure the banks to lower the standards

Yes they did. Read the links that I provided, or provide your own which refute them.

[Mavdog]

Originally Posted by kg_veteran

I never said that, and you know it.

the quote from kurtz, that you posted, said "Using provisions of a 1977 law called the Community Reinvestment Act (CRA), Chicago ACORN was able to delay and halt the efforts of banks to merge or expand until they had agreed to lower their credit standards".

You said, "did acorn threaten lawsuits if the bank would not lend to unquaified borrowers? that is the argument that you appear to make, and it is not supported by any facts. if you could produce any backup to support your assertion, let's see it."

In response, I produced the various quotes and links above demonstrating that ACORN threatened to file regulatory complaints against banks that would have effectively delayed attempts by those banks to merge or expand unless those banks would comply with ACORN's demands to reduce their credit standards and/or pay them consulting fees.

No, my position is that ACORN pressured banks into lower their credit standards by threatening to file regulatory complaints using provisions of the CRA, as demonstrated by the links and quotes I provided.

Actually, it shows that ACORN intimidated banks into reducing their credit standards, thereby making loans to borrowers who otherwise would have been unqualified.

Yes they did. Read the links that I provided, or provide your own which refute them.

the links merely say that acorn did what they allege, and they offer no evidence that banks were forced to lend to unqualified borrowers.

the cra mandates that lenders keep records on loan applications, who was approved and who was denied. any bank that follows prudent lending guidelines for approving and denying loans is in compliance. there is no requirement to change any bank's standards to comply with cra.

acorn pushed to increase lending to lower income and minority borrowers, it was up to the lender to determine which loans were of the amount and quality of borrower to fund.

[kg_veteran]

Originally Posted by Mavdog

the quote from kurtz, that you posted, said "Using provisions of a 1977 law called the Community Reinvestment Act (CRA), Chicago ACORN was able to delay and halt the efforts of banks to merge or expand until they had agreed to lower their credit standards".

Right. How did you turn that into me saying that "the cra mandates that banks lend to unqualified borrowers"? Because I never said that.

the links merely say that acorn did what they allege, and they offer no evidence that banks were forced to lend to unqualified borrowers.

the cra mandates that lenders keep records on loan applications, who was approved and who was denied. any bank that follows prudent lending guidelines for approving and denying loans is in compliance. there is no requirement to change any bank's standards to comply with cra.

acorn pushed to increase lending to lower income and minority borrowers, it was up to the lender to determine which loans were of the amount and quality of borrower to fund.

Do you acknowledge that there is a difference between a statute requiring/forcing/mandating something and ACORN pressuring/intimidating/coercing banks using the threat of regulatory complaints?