Obama Spearheaded Effort Forcing Bad Loans

Obama was part of the movement to force banks to make high risk loans but he now blames them!

by Steve Baldwin

This week we saw Obama on all the news shows blaming banks for the credit crisis saying that "you guys caused the problem" and calling them "fat cats."

This is the height of hypocrisy. Let me remind everyone that banks only operate within the regulatory environment that politicians create for them. All throughout the 80's and 90's, leftist groups led by ACORN harassed banks with protests, boycotts and lawsuits, falsely claiming banks were "discriminating" against minorities in terms of their lending practices.

The allegations were bogus. Banks do discriminate, however, against people with shaky finances regardless of race. And they should. Banks are not a welfare program. They're a business. They make lending decisions based on hard numbers such as a person's credit rating. That really don't care what race a person is; if someone's credit history gives a bank reason to believe its loan will be paid back, they'll make the loan. However, this was all before Congress started to meddle in banks' lending decisions.

Many of the 60's activists ended up getting involved with groups that harassed banks and filing lawsuits against them. Some of these suits were successful in that they often ended in settlements in which the banks agreed to make high risk loans to people who simply were not credit worthy. Eventually, this movement led to Congressional legislation called the Community Reinvestment Act, which applied even more pressure onto banks to make lending decisions based not on fiscal worthiness but on "diversity." And that was the beginning of the credit crisis.

So lets be clear here. Banks have been forced to make high risk loans as a result of years of protests, legislation, boycotts, and the CRA act. And who was involved with all of this? Why, our very own anointed one. Barack Obama.

You can see his name here in the actual docket from one ACORN suit against Citibank:
http://www.mediacircus.com/wp-content/uploads/2008/10/FH-IL-0011-9000.pdf

Or you can read more about this case here:
http://www.mediacircus.com/2008/10/obama-sued-citibank-under-cra-to-force-it-to-make-bad-loans/

Yet Obama has the audacity to blame banks for acting under regulations that the movement created by ACORN successfully pushed for?

Not that's chutzpah.

Obama's defenders have tried to play this down, saying that Obama was only one of a group of attorneys involved with the case and was not the lead attorney. That is true, but what they ignore is the fact that Obama was involved in many aspects of ACORN, from speaking at its training schools to encouraging leftist foundations to give it funding. Obama deeply believes in ACORN's anti-corporate, anti-free market philosophy, including the belief that banks engaged in racism even though no one has even proved this reckless allegation.

It time to face the truth folks: Obama was part of the "social justice" movement which created the incredibly stupid regulatory climate that caused banks to make loans they otherwise would never have made.


Steve Baldwin
Baldwin Research & Consulting