The GOP Scapegoats ACORN

John McCain And Republicans Are Trying To Blame ACORN For Crisis That Deregulation Helped Bring About

(The Nation)  This column was written by Peter Dreier and John Atlas.

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An increasingly desperate Republican attack machine has recently identified the community organizing group ACORN as Public Enemy Number One. Among ACORN's alleged crimes, perhaps the most serious is that it caused, nearly single-handedly, the world's financial crisis. That's the fantasy. In the reality-based world, and financial crisis.

Since the 1970s ACORN, which has 400,000 low- and moderate-income "member families" in more than 100 cities in forty states, has been warning Congress to protect borrowers from the banking industry's irresponsible, risky and predatory practices--subprime loans, racial discrimination (called "redlining") and rip-off fees. ACORN has persistently called for stronger regulations on banks, private mortgage companies, mortgage brokers and rating agencies. For years, ACORN has alerted public officials that the industry was hoodwinking many families into taking out risky loans they couldn't afford and whose fine print they couldn't understand.

Now John McCain and his fellow conservatives are accusing ACORN of strong-arming Congress and big Wall Street banks into making subprime loans to poor families who couldn't afford them, thus causing the economic disaster. McCain's campaign is running a one-and-a-half-minute video that claims Barack Obama once worked for ACORN, repeats the accusation that ACORN is responsible for widespread voter registration fraud and accuses ACORN of "bullying banks, intimidation tactics, and disruption of business." The ad claims that ACORN "forced banks to issue risky home loans--the same types of loans that caused the financial crisis we're in today."

For months, the right-wing echo chamber--bloggers, columnists, editorial writers and TV and radio talk-show hosts--has pitched in with a well-orchestrated campaign to blame the mortgage crisis on ACORN and the Community Reinvestment Act (CRA), the 1977 anti-redlining law. In a September 27 editorial, the Wall Street Journal wrote that "ACORN has promoted laws like the Community Reinvestment Act, which laid the foundation for the house of cards built out of subprime loans" and then falsely claimed the bailout bill would create a trust fund "pipeline" to fill ACORN's coffers. On October 14 the Journal's lead editorial, Obama and ACORN, described ACORN as a "shady outfit" and accused the group of being "a major contributor to the subprime meltdown by pushing lenders to make home loans on easy terms, conducting 'strikes' against banks so they'd lower credit standards."

Discussing the mortgage crisis on his Fox News show, Your World, Neil Cavuto commented, "Loaning to minorities and risky folks is a disaster."

Over at the Washington Post, columnist Charles Krauthammer complained that the CRA had led banks and other lenders "to extend mortgages to people who were borrowing over their heads." Holding forth on The O'Reilly Factor, Laura Ingraham laid the foreclosure problem on Bill Clinton, who "pushed all these institutions to lend to minority communities." Many of the loans, she said, were "very risky." Former Arkansas Governor Mike Huckabee, a putative populist, echoed on the Hannity & Colmes Show: "The truth is that Democrats controlled the ability to fix this [the mortgage crisis]. It was their harsh regulation under the Community Reinvestment Act that started this ball rolling down the hill. "

On September 10 on Fox & Friends, National Review columnist Stanley Kurtz described ACORN as "a group of community organizers [who] specialize in putting pressure, really kind of intimidation tactics, on banks, to get these banks to make high-risk loans to low-credit customers.... They even show up at the homes of bank officials to scare them and their families. They send demonstrators into the lobbies of banks, all to get the banks to make these high-risk loans to people with low credit." McCain's anti-ACORN attack video is almost a word-for-word duplication of Kurtz's comments.

The right-wing case against the CRA is entirely bogus--a diversionary tactic to take the heat off the financial services industry and its allies, like McCain. The CRA applies only to depository institutions, like commercial and savings banks, but thanks to Congress's deregulation mania, there are now many other lenders, including private mortgage companies like CitiMortgage, Household Finance and Countrywide Financial (which was recently bought out by Bank of America). These outfits, which exist in a shadow world without government oversight, account for most of the predatory loans in trouble today.

When Congress enacted the CRA in 1977, the vast majority of all mortgage loans were made by lenders regulated by the law. In 2006 only about 43 percent of home loans were made by companies subject to the CRA. Indeed, the main culprits in the subprime scandal--the nonbank mortgage companies, which successfully grabbed the bulk of the mortgage market away from the CRA-regulated banking industry--were not covered by the CRA.

Wall Street investment firms--including Lehman Brothers, Goldman Sachs, Bear Stearns and Citigroup--set up special units, provided mortgage companies with lines of credit, then purchased the subprime mortgages from the lenders, bundled them into "mortgage-backed securities" and sold them for a fat fee to wealthy investors worldwide, typically without scrutiny. By 2007 the subprime business had become a $1.5 trillion global market for investors seeking high returns. Because lenders didn't have to keep the loans on their books, they didn't worry about the risk of losses.

Congress passed the CRA after many studies, using the banks' lending data, had documented widespread racial discrimination in mortgage lending. The CRA encourages federally chartered banks to examine the credit needs of the communities they serve and to lend based on these needs--for small businesses, homes and other types of loans. It does not require banks to make loans to businesses or people who can't repay them. It does not ask banks to engage in charity. It simply tells banks: don't discriminate against qualified borrowers.

At first, many banks were reluctant to make loans to minority borrowers seeking to fix up their homes, buy new ones or start new businesses in urban neighborhoods. In the late 1970s and early '80s, community organizing groups like ACORN, National People's Action and others pushed banks and federal regulators to remove their racial blinders. Once they did so, banks discovered that many working- and middle-class black and Latino borrowers were excellent customers with good credit histories. These new markets generated good profits on stable loans with little risk.

The explosion of subprime mortgages was touched off in the early twenty-first century, as the number of lenders regulated by the government and covered by the CRA dramatically dwindled. In 2002 subprime loans made up 8 percent of all mortgages; by 2006 they had soared to 20 percent. Since 2004 more than 90 percent of subprime mortgages have come with exploding adjustable rates.

Not surprisingly, the foreclosure rates on subprime, adjustable-rate and other exotic mortgage loans have run four to five times higher than the foreclosure rates on conventional CRA mortgages. Testifying before the House Financial Services Committee in February, University of Michigan law professor Michael Barr reported that only about 20 percent of subprime mortgages were issued by banks regulated by the CRA. The other 80 percent of predatory and high-interest subprime loans were offered by financial institutions not covered by the CRA and not subject to routine examination or supervision. "The worst and most widespread abuses occurred in the institutions with the least federal oversight," Barr told Congress.

[zante99]

In my search for recent news I found this interesting article from last year. I would like to know if any of the posters above would go back and post a correction or an apology to all the people that questioned ACORN's operation they called Nazis, given the recent news of voter registration fraud in Nevada, Washington, Florida and of course the videos of housing loan advise to open underage illegal alien brothels. Nor do I see an update article from the authors of the article above regarding ACORN's operation! The silence is deafening!

[noloyalisti]

Typical Republi Cons, blaming someone for their failed "free" market policy disaster. I am just glad that this happened now, that Ray Guns has been exposed as the 2nd worst pResident of all time.

It''s simple: whatever a Republican says, it is exactly the opposite. That goes for charges of terrorist, communist and claims to be for the people of the United States and patriotic. It is all exactly the opposite.

[noloyalisti]

That''s rich, the Government of Pigs (GOP) party, corrupt and crooked, blaming others for vote fraud. After stealing two elections and setting the standard for low life slime.

Let''s vote for more of the McSame and show the world how smart we are. More debt, war, torture, spying and corporate crime.

[xlib]

My, my, brnging this story back I guess we can expect more of the same. Race baiting and class envy.
Where''s the story on joe biden that was running this morning? Must be the facists at cbs didn''t like some of the posts.
Guess we''re the next Venezuela where the government takes over the media. H(*l, they already have. Just ask the Orlando station.

[prb333-2009]

). Poor legislation + ACORN (a paper "non-partisan" but overtly democratic biased organization) = a train wreck looking for a place to happen. ACORN activities specify time and the place of the demo- sponsored train-wreck, right before the selection of ACORN%u2019s choice for the next president Barack Obama%u2026Coincidence, it is not.

[element51]

junglejimy12....Please explain exactly HOW Acorn is committing voter fraud. You claim that they are and I''m calling you to explain yourself. Can''t do it can you? I don''t know who "Dodaddy" is but, correct me if I''m wrong, Sadam is DEAD. As for Hamas, please show proof of your claim. Just one item of proof from a non partisian source. Can''t do that either, can you? As usual, you trolls come on here with all these wild claims and when someone asks you to back it up you disppear or simply ignore the questions.

[element51]

There was a time not long ago when I would read the neocon posts on here and let my blood pressure almost max out. I knew it was just a pack of lies but I was afraid that people would believe the lies. But as time passed and lie after lie was debunked I started to think that, as my parents always told me, the truth will always win out. But now as I watch the same old lies being used over and over I have more of a tendency to laugh than to get angry. I actually feel sorry for OneAmerican7 as his posts are so pathetic. With less than two weeks to go, we have not won yet but we are in a pretty good position. If we lose, especially in states where the vote is very close, it will mean that the republican cheaters have done their job well. We can expect the worst from the republican trolls,you know who you are, on here so don''t let them get to you. Desperation usually brings out the worst in people.

[nixnax-2009]

CACA DEL TORO

[nixnax-2009]

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[ofbyfor3]

''...Michael Barr reported that only about 20 percent of subprime mortgages were issued by banks regulated by the CRA. The other 80 percent of predatory and high-interest subprime loans were offered by financial institutions not covered by the CRA and not subject to routine examination or supervision. "The worst and most widespread abuses occurred in the institutions with the least federal oversight," Barr told Congress.''

In other words, the CRA, if anything, had regulations that prevented further financial abuse.

Institutions that were not regulated by the CRA should not have been allowed to get involved in offering low-income loans. Either accept the CRA regulations or stay out of this sector.

In any case, the facts show that the CRA did NOT cause this crisis.

[frankie2fing]

To actually perpetrate fraud a person would have to go to the polling location, present id showing that he/she is the person on the voter registration card, and then actually be given permission to vote. The journey is long and difficult.
Posted by afmca

But not impossible. There were many suspected voter fraud occurrences in OHIO in 2004. Oh, that is right, they were in Republican districts. That CAN NOT be voter fraud, we all KNOW how honest the GOP is. Couple this with sending 40% less voting machines to low to middle class districts and cutting off voting, even though there were people in line (some estimates as high as 40,000 in Democratic areas) and out pops 4 more years of dubya. Voter fraud? Never heard of it.

[jimesmith2]

Only when these hypocrite politicians come clean with their own lives should they cast stones. Make them eat their own vile. Don''t let Lindsay Graham hide in the closet any more! Force him out of the South Carolina closet and let him get a good taste of his own bigotry!!!

[jimesmith2]

For the party who declares night is day and is full of (BS) transparency: Let''s have all the gay Republicans come out of the closet. first in line should be all the biggest of hypocrites like Lindsay Graham who is not just a little gay, but like flaming gay.

[mumu11]

Is there no way to charge those crooks with label? The first amendment may cover spin and it definitely covers opinions, but it doesn''t cover slander, so why do those outright lies go unpunished?

[idnnsg]

The GOP is toast. The neocons killed it, and the current financial crisis is the final nail in the coffin. McCain has championed DEregulation of the financial markets and "trickle-down" (a.k.a, "voodoo") economics for his entire career, so McCain''s campaign is toast. And there ain''t nuthin'' nobody can do to change that! Regardless, the GOP tries really hard to blame everybody else for their own failures. Blaming ACORN is simply laughable. You''ve got be be REALLY, REALLY, REALLY STU.PID to fall for it. Is anybody here that stu.pid? (Oh yeah, OneAmerican7 is!!!)

America needs a change in direction. America is ready for a change in direction. And McCain just offers more of the same Bush cr@ppola, only he''s even more desperate and pathetic sounding than scrub!

Now is our chance. Barack Obama is the change we''ve been looking for. VOTE!

[walt1944-2009]

It has been learned that the neocon Fascist Nazi Republicans have determined that the voting registration group ACORN, one of those evil social activist groups, is responsible for the economic chaos gripping Wall Street, the freeze of credit between banks, the loss of millions of jobs, and the advent of a global recession!

The Republicans are also blaming ACORN for the Iraq War, the losing situation in Afghanistan, global warming, the Russian invasion of Georgia, tainted milk from still-RED China, high energy costs, and John McBush McCain unable to remember how many houses and cars he has!

The neocon Fascist Nazi Republicans are convinced that ACORN is a "front" for Al Qeada, that the real brains behind ACORN is Osama Bin Laden (remember him?), and that Bill Ayers is secretly training ACORN for world domination using "terrrrrorist" tactics such as waterboarding, electric shock, sleep deprevation, and using pit bulls with lipstick!!!

SIG HEIL, THAT SOUNDS LIKE MY KIND OF GUY!!!, BUSH!!!
sig heil, I VOTE AGAINST TORTURE, WHEN I''M NOT THERE TO VOTE FOR IT!!!, McBush!!!
sig heil, I HAVEN''T DONE A THING WRONG, NO MATTER WHAT THEY SAY!!!, Palin!!!

[caldwellptr]

Barack Obama is a terrorist-supporting, Jew-hating Socialist who wants to impose a dictatorship on America.
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Posted by OneAmerican7 at 06:15 PM : Oct 25, 2008
+ report abusea

Ah ... the ties that bind, except for any ties to reality.

[wogerwabbit]

Then ACORN checks for fraud and throws some out.
Posted by afmca at 03:23 PM

Actually, it''s against the law for them to throw the bogus registrations out. They flag them and give them to the election officials to approve or disqualify.

[skysoldier75]

The Republicans always spin lies into truth and truth into lies.

It''s the GOP''s primary political modus operandi, and it really surprises no one anymore.

If it comes from the GOP as "truth" you can bet your last dime that it''s a lie.

If the GOP claims something is a "lie", then you can rest assured that it is, in fact, the truth.

The Republican party is all about deceit, pure and simple. If they actually stuck to the truth NOBODY would EVER vote for them.

The GOP is the party of lies.

[afmca]

Of course the are scape goating ACORN. Fear and lies are what the Republican Party is about. Minorities are crashing through the plantation gates and the rich, white ruling class is going back to what works so well ... appeal to the latent bigotry in their white base.

Why is the ACORN scare a hoax? First, ACORN is actually registering no one. They are taking applications for registration. Then ACORN checks for fraud and throws some out. Then they are presented to the state which also check for fraud and throws some more out. To actually perpetrate fraud a person would have to go to the polling location, present id showing that he/she is the person on the voter registration card, and then actually be given permission to vote. The journey is long and difficult.

If you really want to discuss fraud look to the hanging chads in Florida in 2000, the Supreme Court awarding Bush his first term, and Ohio irregularities both in 2004 and again this year. That is fraud and it is a policy of the Republican National Party.

If ACORN was not associated with blacks and other minorities this attack would never be made; it is only possible because of the ignorance, intolerance and bigotry rampant in the Republican Party and its base.