The Star Players in the ShoreBank Story

The Shorebank story is quite complicated and filled with literally hundreds – if not thousands — of individuals who have been in some way involved in the unfolding of an intriguing saga. It has been difficult to narrow down the field of characters in order to focus on just a few. Some of the names are familiar, and some are relatively unknown (except, perhaps, within the context of their own circles of influence).

The original founders of Shorebank probably didn’t dream that this bank would have the worldwide influence that it now has. They were all very active in their communities and had a desire to see the South Shore neighborhood re-built to its former state of safety and community life. The neighborhood had suffered economically and was becoming run-down and plagued by crime. Their hope was to re-invest and re-enliven this neighborhood of Chicago. They made loans towards the renovation of many of the buildings which were deteriorating and in disrepair. They also invested in new building projects to benefit the residents of South Shore.

For 30-plus years Shorebank has seen its founders’ dreams realized; and beyond those dreams, Shorebank has become the catalyst for international financing — especially that directed toward low-income people in many countries of the world. The Community Reinvestment Act, passed into law in 1977 during President Jimmy Carter’s term of office, encouraged financial institutions to make loans to low-income borrowers. Ron Grzywinski (one of the original founders of Shorebank) was the only banker to testify before Congress in support of the Community Reinvestment Act. Its passage was instrumental in paving the way for Shorebank’s success. The bank steadily grew financially and facilitated the renewal of poverty stricken areas through the rest of the 1970’s and early 80’s, catching the attention of then-Governor Bill and Hillary Clinton of Arkansas (in fact, according to the IFA, Bill is still advocating on behalf of ShoreBank).

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Tags: Adele Simmons, Arkadelphia, Arkansas, bailout, Barack Obama
Posted Mar 13th 2010 at 6:01 am in Economics, Featured Story, Financial Services, News, Politics | 8328250 Commentshttp://biggovernment.com/centralillinois912project/2010/03/13/the-star-players-in-the-shorebank-story/The+Star+Players+in+the+ShoreBank+Story2010-03-13+14%3A01%3A14Central+Illinois++9%2F12+Project

What is the Center for Responsible Lending?

On Wednesday, we brought you the story of a little report from the Boston Fed and its role in creating the housing bubble. In that piece, we mentioned an organization you probably hadn’t heard of before, the Center for Responsible Lending. It is one of the more influential–in a bad way–organizations you don’t know. Over the coming weeks, we’ll lift the veil on this organization. Consider today’s installment a primer.

The Center for Responsible Lending is the most influential liberal advocacy group dealing with the financial services industry in the nation’s capital. It is the policy arm of credit unions based in North Carolina and California. Yes, its parent organization has a vested interest in the outcome of CRL’s advocacy.

The Center performs both public policy research and lobbying. (Lots of lobbying, but that is for another day.) Despite its well known left wing prejudices, the media uncritically accepts the Center’s published papers, giving the group extra heft on Capitol Hill.

The Center aggressively criticizes lending discrimination and pushes lenders to increase their underwriting to poor neighborhood where borrowers are less likely to be able to pay back mortgages. The Center is keenly interested in the redistribution of wealth and cares little about the financial safety and soundness of the banks it targets.

Lenders who fail to cooperate with the Center are accused of “redlining,” i.e. illegally discriminating against borrowers in low-income neighborhoods.

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Tags: Center for American Progress, Center for Responsible Lending, Community Reinvestment Act, financial services regulation, George Soros
Posted Mar 12th 2010 at 11:57 am in Economics, Financial Services, Regulation | 8818660 Commentshttp://biggovernment.com/publius/2010/03/12/what-is-the-center-for-responsible-lending/+What+is+the+Center+for+Responsible+Lending%3F2010-03-12+19%3A57%3A59Publius

ShoreBank’s Evolution from Community-Based Banking to the Microfinancing Arena

In the midst of the radical social atmosphere of the 1960s, a group of Chicagoans, Ron Grzywinski, Milton Davis, James Fletcher, and Mary Houghton, came together to found South Shore Bank in the 1973 with a goal to provide loans to minority owned small businesses.

Ron Grzywinski had banking experience with Hyde Park Bank. Milton Davis was a University of Chicago employee and the Chicago leader of the Congress of Radical Equality (CORE).  James Fletcher had previously worked in President Johnson’s administration as part of the internal transition team and with the Citizen’s Action Program in the Office of Economic Opportunity.  Mary Houghton, at that time, was running a daycare program for low income families.

These four individuals had often met to discuss ways in which they could help the needs of urban society by becoming a financial intermediary for social development and community actions. These discussions led to the creation of a minority lending program at Hyde Park Bank. With the influence of Al Raby, a Chicago black rights leader, they looked for the next step to continue their goals of providing loans to small businesses in neighborhood development. Grzywinski stated, ” community-based organizations appeared to be the only organizations in society that cared about the broad range of needs that exist in urban communities”.

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Tags: Bill Clinton, Bob Nash, Chicago, Community Development Financial Institutions Act, Community Reinvestment Act
Posted Mar 5th 2010 at 12:21 pm in Economics, News | 8288639 Commentshttp://biggovernment.com/centralillinois912project/2010/03/05/shorebanks-evolution-from-community-based-banking-to-the-microfinancing-arena/ShoreBank%27s+Evolution+from+Community-Based+Banking+to+the+Microfinancing+Arena2010-03-05+20%3A21%3A23Central+Illinois++9%2F12+Project

Jesse Jackson Sr. Blames ‘Unenforced Civil Rights’ Law For Housing Crisis, Denies His Own Involvement Shaking Down the Banks

At a speech at Claremont McKenna to honor Martin Luther King Jr. in mid-January, the subject of Jesse Jackson Sr.’s new ire was the “banksters” — Wall Street fat cats, who are causing all of our problems.

Naturally, Jackson ignored his own role in housing crisis. That he made his argument against banks at one of the schools that produces the most investment bankers in the country did not go unnoticed – however. Those hoping to listen to watch his entire speech can watch it here.

Jackson decried the “biggest shift of wealth in American history in the last 9 months.” He assailed Obama’s so-called spending freeze. “We’ll freeze the rich in their wealth and the poor in their poverty. . . . Freeze? They have already frozen modifications of home foreclosures.” And he applauded Roosevelt’s “direct investment in the poor” and for “breaking up their ability to be indifferent to the poor.” “Banks serve at the privilege of the state and their mission is to lend and invest,” he said, not presumably to get paid back.

Of course much of the speech sounded like the usual socialist rhetoric, which he claimed Martin Luther King Jr. was trying to “take us there” – wherever there is.

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Tags: Civil Rights, Claremont M, Community Reinvestment, Community Reinvestment Act, Healthcare
Posted Feb 21st 2010 at 9:51 am in Economics, Healthcare, Justice/Legal | 76058145 Commentshttp://biggovernment.com/cjohnson/2010/02/21/jesse-jackson-sr-blames-unenforced-civil-rights-law-for-housing-crisis-denies-his-own-involvement-shaking-down-the-banks/Jesse+Jackson+Sr.+Blames+%27Unenforced+Civil+Rights%27+Law+For+Housing+Crisis%2C+Denies+His+Own+Involvement+Shaking+Down+the+Banks2010-02-21+17%3A51%3A27Charles+C.+Johnson

Personal Responsibility a Virtue Lost on ACORN’s Wade Rathke

Like a phoenix released to spread it wings, ACORN founder and former chief organizer Wade Rathke has been letting it all hang out on his lively, but troubling blog.

He recently attacked no-nonsense Arizona Sheriff Joe Arpaio, lamented the continuing questions regarding ACORN/SEIU involvement in the 2010 census, and even went after me on one occasion.

Now he’s attacking the concept of personal responsibility, something our society is sorely lacking. He’s encouraging homeowners who are falling behind on their mortgage payments to simply walk away from their homes, as if the money still owed is neither their problem nor their concern.

At least his message is consistent, because Rathke has always been the Johnny Appleseed of bad advice when it comes to housing.

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Tags: ACORN, ACORN Housing, Community Reinvestment Act, foreclosure, housing bubble
Posted Jan 12th 2010 at 8:21 am in ACORN, Economics, News | 58686107 Commentshttp://biggovernment.com/kolson/2010/01/12/personal-responsibility-a-virtue-lost-on-acorns-wade-rathke/Personal+Responsibility+a+Virtue+Lost+on+ACORN%E2%80%99s+Wade+Rathke2010-01-12+16%3A21%3A00Kyle+Olson

FDIC Survey Proves Payday Loan Customers Aren’t Stupid

In 2007, the FDIC set up an ill-conceived program for 30 banks to offer short-term loans of up to $1,000, at a maximum APR of 36%.  They thought this “Affordable and Responsible Consumer Credit” program would prove that lenders could make a profit under these conditions while still serving the consumer’s needs.

The results are akin to the hapless ski jumper at the opening of Wide World of Sports, who slips, falls, flails, smashes through a banner, and lands with a resounding thud on the landing pad.

While payday loans are approved in a mere 15 minutes, most of these FDIC-sponsored loans took more than 24 hours to approve — failing consumers who needed their funds immediately; some required direct deposit, credit checks and possibly a financial literacy class or collateral (none of which are required for a PDL); some required a portion of the loan be put on deposit (not part of the PDL process); only a few thousand loans were made because of said inconveniences (compared to 100 million loans annually for PDLs due to their convenience); and none of the institutions actually made a profit while some lost money, even when including an origination fee of up to $50 (whereas PDL’s profitability allows them to be widespread and easily accessible).

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Tags: Annual Percentage Rate, APR, bank deposit, CARD Act, Community Reinvestment Act
Posted Dec 11th 2009 at 11:07 am in Economics | 4241020 Commentshttp://biggovernment.com/lmeyers/2009/12/11/fdic-survey-proves-payday-loan-customers-arent-stupid/FDIC+Survey+Proves+Payday+Loan+Customers+Aren%27t+Stupid+++2009-12-11+19%3A07%3A12Lawrence+Meyers

ACORN Whitewash: ACORN Report Is Dishonest Legal Hair-Splitting

I participated in listen-only mode in the teleconference call Monday in which ACORN’s allegedly independent “audit” was released.

I regret it was difficult to make out what the players were saying.

That’s because as the left ferociously circled the wagons, all the creaking wheel noises in the background drowned out much of what was said.

Scott Harshbarger, ACORN ally and former attorney general of the Commonwealth of Massachusetts

One the main points that ACORN ally and former Massachusetts Attorney General Scott Harshbarger and ACORN CEO/chief organizer Bertha Lewis were trying to make was that ACORN, i.e. the lead entity that controls the ACORN network, and ACORN Housing, are separate entities.

Because ACORN Housing and ACORN are different organizations neither is responsible for the other, they argued. In other words, ACORN is not responsible for ACORN Housing employees caught on video encouraging illegal behavior, and vice versa, they reasoned.

Harshbarger said on the conference call

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Tags: ACORN, ACORN Headquarters, ACORN Housing, AmeriCorps, Bertha Lewis
Posted Dec 8th 2009 at 9:33 am in ACORN | 4233427 Commentshttp://biggovernment.com/mvadum/2009/12/08/acorn-whitewash-acorn-report-is-dishonest-legal-hair-splitting/ACORN+Whitewash%3A+ACORN+Report+Is+Dishonest+Legal+Hair-Splitting2009-12-08+16%3A33%3A38Matthew+Vadum

ACORN’s Fingerprints on Mortgage Crisis Appeared 20 Years Ago

ACORN has been fairly criticized for its actions that led up to the mortgage crisis, which culminated in a huge rash of foreclosures last year.  While the tide appears to be waning, it’s a problem that is still occuring.

Specifically, ACORN strong-armed banks and worked with members of Congress, such as Barney Frank, to weaken credit standards in order for banks, as well as Fannie Mae and Freddie Mac, to fund risky mortgages.  Mortgages, of course, that stood little chance of ever being paid, as we witnessed last year.

But ACORN’s penchant for shaking down banks didn’t begin 2 years ago, or even 10 years ago.  Check out this article from the Atlanta Journal-Constitution from 1988.  Grant Williams was an organizer for ACORN at the time ( I wrote here about his new gig at SEIU), and he managed to weasle ACORN into a bank’s proposed interstate merger.  From the article:

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Tags: ACORN, acorn scandal, Annette Wilcoxson, Bank South, Barney Frank
Posted Dec 6th 2009 at 9:41 am in ACORN, History, News, Politics | 4145037 Commentshttp://biggovernment.com/kolson/2009/12/06/acorns-fingerprints-on-mortgage-crisis-appeared-20-years-ago/ACORN%27s+Fingerprints+on+Mortgage+Crisis+Appeared+20+Years+Ago2009-12-06+16%3A41%3A34Kyle+Olson

Big Government Media: CRA For News Organizations?

Reading this account of discussions at the “U.S. Federal Trade Commission workshop on the future of journalism in the Internet age,” it appears “legacy media” might just slash and burn the First Amendment, shredding it to pieces on their journey to statist organ status.

In their desperation to stay alive, as newspapers and other legacy channels of distribution collapse, surviving publishers will maneuver themselves for prime suckling positions on the public teat. The keepers of the teat appear willing to enable the feast.

Federal and state officials this year have explored how the government might play a role in helping ease the financial travails of news organizations. Sen. Benjamin Cardin (D., Md.) this spring proposed a bill that would allow newspapers to operate as tax-exempt institutions. [MORE - WSJ]

“Public” money comes with a labyrinth of exponentially multiplying political strings attached. Just ask GM, AIG, and BofA.

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Tags: Community Reinvestment Act, CRA, Legacy Media, MSM, News Organizations
Posted Dec 4th 2009 at 11:59 am in Media Criticism, Politics | 40258142 Commentshttp://biggovernment.com/amarcus/2009/12/04/big-government-media-cra-for-news-organizations/Big+Government+Media%3A+CRA+For+News+Organizations%3F2009-12-04+18%3A59%3A14Andrew++Marcus

The Soros Plan To Kill Capitalism

Having purchased, rented, or placed a down payment on all the political influence up for sale in America, leftist troublemaker George Soros now plans to ramp up his war on markets worldwide by creating an “Institute for New Economic Thinking” (INET).

“The system we have now has actually broken down, only we haven’t quite recognized it and so you need to create a new one and this is the time to do it,” Soros told the Financial Times last month.

Soros said he wants Communist China to run this new financial system. “You really need to bring China into the creation of a new world order, a financial world order,” Soros said.

If that doesn’t send a chill down the spines of freedom lovers in America and elsewhere, nothing will.

In an interview with Der Spiegel last year Soros said European-style socialism “is exactly what we need now. I am against market fundamentalism. I think this propaganda that government involvement is always bad has been very successful — but also very harmful to our society.”

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Tags: ACORN, American Spectator, Community Reinvestment Act, Democratic Party, Der Spiegel
Posted Nov 5th 2009 at 12:34 pm in Culture, Economics, Politics | 25974121 Commentshttp://biggovernment.com/mvadum/2009/11/05/the-soros-plan-to-kill-capitalism/The+Soros+Plan+To+Kill+Capitalism2009-11-05+19%3A34%3A43Matthew+Vadum

ACORN and SEIU: Anatomy of a Shakedown

Across America community organizations operate in impoverished, disadvantaged, low-income or minority communities. No matter the phrase used to describe the special interest, a group exists to represent it. Often these organizations initially have good intentions and seek to give back and serve the community in which they operate. When government money, power and influence become part of the equation however, lofty principles tend to fall by the wayside. Other organizations are created to cause chaos and disrupt the system.

The Association for Community Organizations for Reform Now (ACORN) was perceived by many as a well-intended organization, but it appears that the association that Wade Rathke founded was increasingly driven to cause chaos and disrupt the system whenever it could.

BEFORE the Dale Rathke embezzlement finally became last year, John Fund, in “Grapes of Rathke: ACORN, a liberal activist group, comes under scrutiny. About time,” reported: (more…)

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Tags: ACORN, Booz Allen, Carlyle Group, Community Reinvestment Act, Dale Rathke
Posted Sep 27th 2009 at 5:30 am in ACORN, Big Labor, Featured Story, Obama, Politics | 930271 Commentshttp://biggovernment.com/amoncrief/2009/09/27/acorn-and-seiu-anatomy-of-a-shakedown/ACORN+and+SEIU%3A+Anatomy+of+a+Shakedown2009-09-27+12%3A30%3A58Anita+MonCrief