This
was quickly followed by an attack on affirmative action, which
took some of the shine off the party’s professed change. Now a Republican Congressman from Ohio has
apparently assigned himself the task of finishing the job, of
eliminating once and for all any lingering belief that his party
has actually changed.
U.S.
Rep. Bob Ney (R-OH) has introduced a bill in the House (HR 833)
that would preempt (that is, tear up) every state and local
law in the country that protects borrowers against predatory
lending. At the same time, the Ney bill would weaken
existing federal protections.
By
predatory lending I mean the making of overpriced and abusive
home loans that strip families of equity and often rob them
of their houses through an array of nasty practices that often
lead to repeated refinancings and foreclosures.
Predatory lending is an upside-down world of lenders
who fight the
creation of laws that would require them to take into consideration
a 
borrower’s
ability to repay a loan. These
lenders’ overpriced loans include excessive rates and fees,
extra bogus products, penalties for paying a loan off early
by refinancing with a better company, and clauses in the fine
print that deny borrowers the right to sue once they figure
out how badly they’ve been taken.
Predatory
loans are concentrated in the subprime market.
Subprime loans are supposed to cost a little more to
compensate for borrowers' poor credit. However, according to Freddie Mac and Fannie
Mae, 35 to 50 percent of subprime loans are made to borrowers
who could have qualified for prime loans.
And many subprime loans are, of course, not just reasonably
more expensive; they’re outrageously predatory.
The
federal government releases data on loans made by subprime and
prime lenders. In 2001,
more than one out of four, 27.8 percent, of all refinance loans
received by African-American homeowners were from subprime lenders,
compared to a tiny fraction, 6.3 percent, of the refinance loans
received by white homeowners.
Income
disparities compound the racial ones. Subprime lenders accounted for a whopping 41.7
percent of the refinance loans made to low-income African-Americans
in 2001.
But
the racial disparities remain regardless of income. Upper-income African-American homeowners are
more likely than low-income white homeowners to receive a subprime
loan when refinancing.
I've
talked to scores of the victims of these loans, people whose
lives have been turned upside down, people who've grown suicidal,
who've been unsure for months how they can possibly carry on,
and who have been hit with fresh outrages at every turn.
These stories are devastating, but even worse is the
spreading effect on African-American neighborhoods of houses
left vacant by shark lenders. We cannot build wealth or stability if homeownership
is no more secure than the whim of a predator with fine print
and a toothy smile.
Congressman
Ney’s bill would protect the sharks, not the victims.
Ney would take us all the way back to the good old days
of a few months ago when Senator Lott defined Republicans’ racial
attitude. And Ney would
return us to the tasteful secrecy that preceded Lott’s fit of
honesty. As Eddie Roth
complained in the Dayton Daily News on Feb. 20, and as several
reporters have complained to me, Ney’s staff is not returning
calls from the media on this topic. Ney’s bill is misleadingly titled “The Responsible
Lending Act,” but he doesn’t seem eager to advertise it or to
have it examined too closely.
There
is a twist in the New Republicanism of Bob Ney: states’ rights
have been flung to the ground and trampled by this redesigned
elephant. As Roth wrote,
regarding states, “the industry's strategy is, If you can't
beat 'em, take the matter out of their hands and bring it to
Washington, where money talks louder.”
In
the old paradigm, conservatives and segregationists spoke of
states’ rights as code for white supremacist policies. In the new era that we have entered, Republican
radicals and their corporate masters talk of “national standards”
in order to strip states of the right to regulate lending, or
– for that matter – to control schools, or to cut down on air
pollution, or to devise strategies of addressing crime or drugs.
It’s
nice to see Republicans recognizing the potential of national
policy. It’s too bad
they don’t want to use it to benefit the entire nation.
Ms.
Hurd has been ACORN's National President since 1990. She
lives in Dorchester, Massachusetts and is a trainer at ACORN'
s Leadership School. ACORN, the Association of Community
Organizations for Reform Now, has over 150,000 member families
organized into 700 neighborhood chapters in 51 cities across
the country.
ACORN
has targeted Wells Fargo as an especially egregious predatory
lender. "Wells Fargo has been doing outrageous things in
our neighborhoods,” said Hurd, announcing actions against the
financial giant in 15 cities. “They thought they could get away
with it - we are putting them on notice that they can't. We
see what they are doing, and we are serious about defending
our communities. Wells can expect no peace until our members
are satisfied that they are ending abusive lending practices
and taking steps to repair the damage already done."
For
ACORN's report on Wells Fargo, go to http://www.acorn.org/campaigns/wellsfargo.
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Following
Senator Trent Lott’s expression of the belief that a segregationist
presidential administration could have prevented “the problems
we’ve had all these years,” our current President and his party
announced a new Republican approach of openness to African Americans.
