Eric Holder's Newest Witch Hunt

“The Department of Justice is executing a “Witch Hunt” against banks. Through the DOJ’s Civil Rights Division, Attorney General Eric Holder is forcing banks to “relax their mortgage underwriting standards and approve loans for minorities with poor credit as part of a new crackdown on alleged discrimination,” according to a published report by Investor’s Business Daily after reviewing court documents.”

- Source 1
- Source 2

Deja Vu anyone? According to the article, banks are being forced to make "prime-rate" mortgages to low income blacks and Hispanics with credit problems, even if they are living on welfare. Investor Daily Business News writes that the Department of Justice has ordered banks to advertise that minorities cannot be turned down for a loan "because they receive public aid, such as unemployment benefits, welfare payments or food stamps." No job...no problem.

Isn't this the same failed public policy that led to the financial collapse and recession in 2008? Apparently Eric Holder and Tom Perez (head of Holder's Civil Rights Division) hold the opinion that a credit analysis and repayment ability of the borrower once again doesn't matter. Perez has even compared bankers to the Ku Klux Klan saying that the only difference between the two is that bankers discriminate "with a smile" and "fine print", but they are "every bit as destructive as a cross burned in a neighborhood."

Meanwhile, the regulatory agencies are telling banks to do just the opposite demanding tightened credit standards. Such confusing signals from the federal government are causing banks and borrowers to retreat and who can blame them when government has the power to lock their doors and seize their assets.

The federal government during the last two years has essentially seized the banking industry. What the government doesn't do directly, it controls by regulation, intimidation, and by sheer force and power. Obama got in the car business, the health care business, the energy business, and he's got the government holding most of the cards in banking, too. That's the change; the hope is that he gets fired by the voters in 2012.

Posted by Royal Flush at July 31, 2011 1:25 PM
Comments
Comment #326779

Too bad for the banks. They should not practice racial discrimination.

Posted by: phx8 at July 31, 2011 5:26 PM
Comment #326782

By the way, RF, that’s quite a propaganda machine you’ve got there. Just search this topic and you’ll find site after site after site, all repeating the same thing. It must have cost the banks a huge donation to the GOP PAC’s to gin up this machine, especially considering the unsavory underlying heart of the matter- that banks have been practicing racial discrimination.

Posted by: phx8 at July 31, 2011 5:39 PM
Comment #326783

It appears Eric Holder only wants to enforce laws that benefit minorities.

Posted by: TomT at July 31, 2011 5:39 PM
Comment #326785

phx8, are you saying that the article and quotes are untrue?

Posted by: Royal Flush at July 31, 2011 6:02 PM
Comment #326787

Yes, it’s untrue. There’s no “witch hunt.” A “witch hunt” implies some sort of irrational persecution of undeserving victims. In this case, banks are being forced by DOJ to stop discriminatory lending practices. They earned this. It is rational. They deserved it. And they should stop disciminatory lending practices. Too bad there’s a nondisclosure as part of the deal. We won’t get to name names of the organizations practicing racial discimination.

Posted by: phx8 at July 31, 2011 6:15 PM
Comment #326789

So, RF, how does this propaganda machine work? In mid-July there were a handful of stories about this so-called “witch hunt,” and the story died without notice. Oddly enough, it seems rather difficult to arouse much sympathy among Americans for banks that practice racial discrimination in lending. Yet today, within a matter of hours, site after site after site posts this “witch hunt” story, and the phrases on the various sites are virtually identical. Wow! Instantaneous outrage! What a propaganda machine! I am impressed. That is some echo chamger. So, do you receive an e-mail from American Crossroads with instructions? Or is it someone else? What organization drives this propaganda campaign? It must be someone who is receiving a very, very large check from the banks.

Posted by: phx8 at July 31, 2011 6:26 PM
Comment #326790

Is being turned down for a loan “because they receive public aid, such as unemployment benefits, welfare payments or food stamps” a discriminatory lending practice?

If so, then government bank regulators are full of crap. Which will it be phx8?

Posted by: Royal Flush at July 31, 2011 6:29 PM
Comment #326792

Name the name of the bank.

Oh. That’s right. You can’t. Nondisclosure agreement as part of the settlement.

Posted by: phx8 at July 31, 2011 6:41 PM
Comment #326795

Sorry you can’t answer my question phx8. It is a toughie.

Posted by: Royal Flush at July 31, 2011 7:11 PM
Comment #326799

In answer to your question, yes, that can be a discriminatory lending practice if it is asked in order to screen out one minority at the expense of another, or if it is asked of one racial group and not another (which I suspect is the case here).

You never answered my question. Who suggested you post this article on WB?

And by the way, why not protest the banks for agreeing with DOJ to do this in the first place? If they are being unfairly subjected to wrong-headed regulation, why did they agree to the deal? And why did they insist on a nondisclosure agreement about what happened? Why do we only hear about this through the relative anonymity of an investor site, filled with vague references and few specifics, rather than individual lenders?

Posted by: phx8 at July 31, 2011 7:40 PM
Comment #326806

Phx8 & Royal

All loans should be granted or not w/o any considerations of the race, religion or ethnic background of the applicants.

IMO - banks and others should be prohibited even from gathering information about race or national origin. I have a credit score, as does everybody else. It is not related to my race, but only to my borrowing and paying history.

If DOJ can show that people with identical credit scores and similar incomes are treated consistently differently because of their race by the same institution, then they can complain. Otherwise DOJ has no business in these sorts of business decisions and banks should be under no obligation to loan money to anybody who doesn’t meet their credit requirements.

Banks and businesses in general want to make money. They have no trouble selling to anybody who has money. It is what they do. I don’t believe there are many instances of a bank giving up profit because it wants to discriminate against a black guy. As far as I read, DOJ cannot find such individual cases. That is why it goes with the generalized BS.

Find a case of a guy with a 800 credit score denied a loan because of his race and then we can talk.

Posted by: C&J at July 31, 2011 9:10 PM
Comment #326807

Let me get this straight: most of us have applied for a home or auto loan, and the bank asks those pesky questions like; where do you work, how much do you make, and how much are your monthly bills. If you don’t qualify, you don’t get the loan. But some ignorant bas****, says it is discriminating against minorities if the only income you have is a monthly welfare check. Is’nt this what got us in trouble in the first place; and wasn’t Bush blamed for it? So now that Holder is starting the same old democrat redistribution of wealth trick again; do we blame the next housing bust on Obummer or Bush again?

Posted by: TomT at July 31, 2011 9:14 PM
Comment #326811

C&J-
Get back to me when you can find me a way of verifying large scale Discrimination without asking people getting loans their race.

This is really about redlining, a practice whose outlawing Republicans claim was responsible for the housing crisis. Never mind that defaults on such mortgage were rarer than normal.

This isn’t about those on Welfare being denied housing loans, this is about those who have the money and the credit being denied it disproportionately.

Royal Flush-
Paul Sperry has all kinds of interesting beliefs about things, doesn’t he?

You did mention to everybody that Paul Sperry is a media fellow at The Hoover Institution, a conservative thinktank, didn’t you?

Fair and balanced indeed.

Or that he writes for the leading news organization, World Net Daily, which pushed the Bogus Birth Certificate controversy?

You know how to pick them.

Posted by: Stephen Daugherty at July 31, 2011 9:46 PM
Comment #326813

Stephen

If banks don’t know the race of the applicant, then they cannot discriminate on the basis of race.

I have financed mortgages and other large loans for hundreds of thousands of dollar w/o seeing a loan officer in person. Presumably, they made decisions about my credit worthiness on the basis of my financial information.

It may be the case that members of some groups are denied loans more often because their financial histories differ. This is what we might call in other contexts “diversity” since different choices are made that result in different outcomes.

Discrimination in the bad sense exists only when similar cases are judged differently because of race … or if different cases are judged to be similar. Both are wrong.

So, if you don’t know the race of the person involved, you cannot discriminate on the basis of race. It really is that simple.

Posted by: C&J at July 31, 2011 10:11 PM
Comment #326814

Witches in the banks? I doubt that. Ogres, nasty dwarfs yes, but witches, I don’t think so.

“It appears Eric Holder only wants to enforce laws that benefit minorities.”

That’s right, they hate whitey, especially whitey the banker.

Can any conservatives name a minority person who had no job, living on government assistance, that has gotten a loan for a home? Perhaps your next door neighbor or the guy down the block.

If I’m not mistaken, the only people giving out those kind of loans were Republican owned Mortgage sellers like Ditech and Country Time. Of course, they weren’t holding mortgages, they were bundling and selling as fast and those AAA ratings were being applied. They especially liked the faith based initive.

Posted by: jlw at July 31, 2011 10:39 PM
Comment #326816

C&J-
Really. Pardon me, but how does the Bank not see the race of the customer who just walked in the door?

You’re thinking too bureaucratically. This is about folks dealing with banks in the real world, where you’re face to face with somebody, and the idea of ignoring race, for the racist, isn’t operative.

Posted by: Stephen Daugherty at July 31, 2011 11:46 PM
Comment #326818


I believe Rand Paul presented the conservative opinion on this topic during his election campaign.

Posted by: jlw at August 1, 2011 12:23 AM
Comment #326822

stephen

“Really. Pardon me, but how does the Bank not see the race of the customer who just walked in the door?”


here’s an idea stephen. maybe they could sit in confessional type boxes when applying then no one would know thier race. oh wait….there’s always that pesky accent thing. this whole holder witch hunt is typical of this administration. say one thing in public, and do the opposite behind everyones back. c’mon 2012 !!!!

Posted by: dbs at August 1, 2011 5:36 AM
Comment #326834

PHX8 asks…”You never answered my question. Who suggested you post this article on WB.”

I do a lot of reading of both print material and on the Internet. I read opposing political opinion pieces, hard news and occasionally talk radio. I seldom watch the talking heads on TV.

When I read the articles linked in my post it peaked my interest, and I believed it would be of interest to others.

Posted by: Royal Flush at August 1, 2011 1:27 PM
Comment #326836

SD writes; “This isn’t about those on Welfare being denied housing loans, this is about those who have the money and the credit being denied it disproportionately.”

I guess you read a different article from those I linked. Please post your source and I will read it.

Posted by: Royal Flush at August 1, 2011 1:29 PM
Comment #326856

RF

the part i love the most is that the DOJ is demanding they sign confidentiality agreements so they can never tell the public what they were blackmailed into agreeing to. kind of like molesting a child, and making them sign a legal agreement saying they can never tell the police or thier parents.holder is a real pile of S#!t. but that doesn’t suprise me considering who his boss is. this kind of crap just infuriates me, sorry for venting.


Posted by: dbs at August 1, 2011 4:05 PM
Comment #326858

dbs…I appreciate your comments and frustration with the DOJ. Considering what we have recently experienced with such insanity in mortgage lending, I find it incomprehensible that some on Watchblog defend it.

Posted by: Royal Flush at August 1, 2011 4:12 PM
Comment #326859


Royal, you say this is Deja Vu, banks are again being forced to issue prime interest loans to people who aren’t qualified.

That is not what happened. It was the high interest sub prime loans and an interest rate increase that triggered those high interest rates, doubling or tripling monthly payments that caused the housing collapse. The vast majority of those who got loans were having no trouble making the payments until those huge interest rates kicked in. Do you think it is possible those sub prime lenders knew that many of those mortgages would default and did not care because they were bundling and selling, not holding those mortgages?

Care to guess who owned many of those sub prime mortgage outlets and who their primary customers for those bundled in with prime loans mortgages where? Could it have been the banks in both instances?

The banks claim they were victims, they were not. The tax payers bailed out the banks by bailing out their victims, their customers they were hawking those housing derivatives to. The banks came out of the deal intact and profitable. What do we know about economic bubbles? We know that they grow until the collapse, guaranteed. We know that when they occur, a few make a lot of profit and the many loose wealth.

This was the largest scandal in our history. Involving Wall Street, the banks, regulators, rating agencies and politicians and government officials of both parties. It was swept under the rug with a taxpayer bailout. No government investigations, no guilty parties, no defendants, except in the realm of partisan opinion. Dodd is not going to jail and neither is Shelby.

Posted by: jlw at August 1, 2011 4:12 PM
Comment #326861


Royal, you say this is Deja Vu, banks are again being forced to issue prime interest loans to people who aren’t qualified.

That is not what happened. It was the high interest sub prime loans and an interest rate increase that triggered those high interest rates, doubling or tripling monthly payments that caused the housing collapse. The vast majority of those who got loans were having no trouble making the payments until those huge interest rates kicked in. Do you think it is possible those sub prime lenders knew that many of those mortgages would default and did not care because they were bundling and selling, not holding those mortgages?

Care to guess who owned many of those sub prime mortgage outlets and who their primary customers for those bundled in with prime loans mortgages where? Could it have been the banks in both instances?

The banks claim they were victims, they were not. The tax payers bailed out the banks by bailing out their victims, their customers they were hawking those housing derivatives to. The banks came out of the deal intact and profitable. What do we know about economic bubbles? We know that they grow until the collapse, guaranteed. We know that when they occur, a few make a lot of profit and the many loose wealth.

This was the largest scandal in our history. Involving Wall Street, the banks, regulators, rating agencies and politicians and government officials of both parties. It was swept under the rug with a taxpayer bailout. No government investigations, no guilty parties, no defendants, except in the realm of partisan opinion. Dodd is not going to jail and neither is Shelby.

Posted by: jlw at August 1, 2011 4:16 PM
Comment #326867

This was the largest scandal in our history. Involving Wall Street, the banks, regulators, rating agencies and politicians and government officials of both parties. It was swept under the rug with a taxpayer bailout. No government investigations, no guilty parties, no defendants, except in the realm of partisan opinion. Dodd is not going to jail and neither is Shelby.

Posted by: jlw at August 1, 2011 04:16 PM

I couldn’t agree more with this paragraph. And, I know that the ultimate catastrophe grows from not paying attention when the first signs are visible.

Posted by: Royal Flush at August 1, 2011 4:47 PM
Comment #326868

RF

this reminds me of the type shake downs that jesse jackson is famous for. i believe that was how one of his sons was awarded a lucrative beer distributorship in the chicago area due to one of his shakedowns. why more people don’t see through this type of garbage is amazing. that anyone would defend this typa of activity is even more amazing.

i don’t believe any decent person would deny a loan to a qualified buyer based on race. that being said, we will never rid the world of racists no matter how hard we try, and the type of activity this disgrace of an AG is involved in hurts everyone. can you imagine being a major share holder in a company that is being blackmailed by the very entity the is charged with upholding the nations laws. when they said absolute power corrupts absolutely they weren’t kidding.

Posted by: dbs at August 1, 2011 5:05 PM
Comment #326871

Thanks for your comments dbs. For me, the actions of the AG are criminal and, as you describe, a “shake down”.

I believe that after the general election of 2012 when obama and his bunch of co-conspirators are cut lose from government disservice, there will be many illegal and unsavory actions performed on their watch discovered. One can hope that they will be prosecuted.

Posted by: Royal Flush at August 1, 2011 5:22 PM
Comment #326881

Royal Flush,

You admittedly don’t know anything about the facts of the cases and your links provide only vague clues that they involved discrimination. But for you, the actions of the AJ in bringing the cases is criminal and a “shake down.”

I don’t see any point of debating the issue. You have already prejudged the cases.

Posted by: Rich at August 1, 2011 8:04 PM
Comment #326899

tom humes-
My sources tend to document what they’re saying. Take Media Matters, for instance. They may not be entirely neutral, but when they hit somebody for what they say, they provide the documentary evidence that proves what they say

But where are these documents your think-tank reporter is referencing? Oh, not available. Democrats jump on the Republican’s ALEC program, and what it’s doing, they post all the documents, in addition to their summaries.

And personally? I document what I claim all the time. When I say that unemployment was worse under Reagan than under Obama, I post something to that effect up

But of course, what do you document? I don’t see you going point by point dissecting things I say. I see you declaring the things I say wrong, and doing a bunch of name-calling. But any idiot can declare their opponent wrong, and then rouse their friends to believe that.

That doesn’t make them right. Sometimes, folks on the right are so concerned about winning the debate, that they don’t look at their premises to figure out whether they could or should win an argument simply on those merits. I’m not an angel when it comes to arguing, I put my share of loaded words and attitude into what I write. But I always start from a standpoint of what evidence and logic I can muster to oppose my opponent, because I believe that it’s easier to keep

dbs-
Or, we could encode in the law that you can’t discriminate, and then enforce the law. That sounds much simpler, and much more fair to the person who might end up denied a loan.

Posted by: Stephen Daugherty at August 2, 2011 8:58 AM
Comment #326904
“relax their mortgage underwriting standards and approve loans for minorities with poor credit as part of a new crackdown on alleged discrimination,”

It must be discrimination. It couldn’t possibly be because the “victims” just don’t qualify for the mortgages. Sounds like the 1995 CRA, Part 2. Why not? It worked so well the first time.

Posted by: Kevin Nye at August 2, 2011 2:26 PM
Comment #326909

stephen


“Or, we could encode in the law that you can’t discriminate, and then enforce the law. That sounds much simpler, and much more fair to the person who might end up denied a loan.”


how do you enforce that type of law? you can’t legislate away bigotry. there are plenty of lenders out there that will approve a loan based on borrower qualifications that have nothing to do with race. there will always be a small portion that will deny a loan out of bigotry, even though they’ll never admit to it. good luck proving it. life isn’t fair stephen and no amount of legislation will make it so. it’s no different than looking for a job. if someone just doesn’t like you, for what ever reason, and chooses not to hire you, there aint d!ck you can do about it.

Posted by: dbs at August 2, 2011 5:06 PM
Comment #326913

“Or, we could encode in the law that you can’t discriminate,”

“how do you enforce that type of law? you can’t legislate away bigotry.”

dbs,

On the first matter, it is already encoded in the law that you cannot discriminate in lending practices on the basis of race, color, national origin, religion, sex, familial status or handicap (disability). Federal Fair Housing Act.

Enforcing the provisions is difficult no doubt. But it is not impossible. Sending “secret shoppers” for loans differing only on the prohibited discriminatory characteristics is one approach. Audit comparisons of actual loan outcomes by similarly economically situated applicants differing only by race, color, etc. is another approach to determining an institutional discriminatory practice.

It would seem that most agree that discrimination on certain non-economic characteristics is simply wrong.

The problem with this whole article is that there is absolutely no presentation of the facts of the cases for reasonable persons to make any decision as to the validity of the charges or the reasonableness of the settlements. The linked articles conclude that this is a witch hunt, a backdoor way to force banks to make loans to otherwise credit unworthy applicants, etc. But, what were the facts. What were the allegations? What is the applicable law?

Posted by: Rich at August 2, 2011 6:09 PM
Comment #326994

dbs-
You make people pay a price for it. Reject an otherwise qualified black person? Fines. Civil liability.

As for life being unfair, etc, you know, there will always be an element of unfairness, but the strength of it, and the impunity of it is another matter. Folks once refused to serve black people and white people in the same cafe. That, largely, is in the past. Life got fairer.

So don’t tell me the law can’t help make things fair, it sure can. Smart law, clever law, law that takes reality into account can get the job done. I don’t mirror your sentiment that government can never help in the notion that it can always help. My notion is that good laws written the right way can be fairly helpful.

I’d say I have the easier argument to prove, regardless of how zealously you would stick to yours.

Posted by: Stephen Daugherty at August 4, 2011 2:35 PM
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