It’s a complex issue, and let’s face it, not exactly an exciting one either.  But that’s precisely what the left is counting on.  So, whenever I find myself feeling frustrated that others might not share my same level of fervor on the issue, I remind myself of its complexity and lackluster appeal.  And then, I proceed directly to the source – the bill itself.

I hone in on a few key points in three categories that resonate with most activists I know:  Big Labor, Big Government, and Big Brother.  Put those together in the context of Big Banks, and they spell out big disaster.

As the left goes on demonizing Wall Street and big bankers on one hand, Democratic lawmakers on the other hand are busy making sweetheart backroom deals with them up on Capitol Hill, promoting their legislation to the public as “consumer protection.”  But really, such measures are nothing more than payback to the likes of three-way mortgage entitlement partnership stronghold of the Bank of America, Center for Responsible Lending and Fannie Mae.

Meanwhile Democrats and Obama allies like Organizing for America are also using the issue as a shameless fund-raising opportunity.

The banks actually SUPPORT this bill – so don’t let that “Main Street Not Wall Street” message fool you, no matter which side of this issue you’re on.

Once many people learn about some of what’s in the bill, their reaction of immediate remorse followed by outrage is completely understandable.  Remorse – for some -  for not having engaged their grassroots groups earlier. Outrage over just how much this bill would push the country head first toward socialism.  That’s right, I said the “s” word.  Let’s stop pretending and just call it for what it is, shall we?  Even old school Democrats I talk to feel the same outrage and see the “s” word coming as the result of this bill.  Facing down the inevitable is the only way we’re going to be able to tackle what the radical left has snuck into this thing.  All the while, they have been counting on the apathy of average citizens on BOTH sides, and on the burnout of Tea Party and other patriot group activists.

The reality is this: If we sit back and allow this bill to pass the Senate in its current form, then we deserve the destruction of our privacy, our liberties and of our free market system that will follow.  WE will be the only ones to blame.  Because as bad as we all thought the Health Care bill was for our freedoms, the Financial Reform bill makes Health Care pale in comparison.  No level of remorse could suffice if we failed to engage every last patriot, every last Paul Revere and Sam Adams , during these final days of the legislation.

I’ve found that one way to help other activists digest this bill has been to put all of the actual financial details aside and focus solely on some of the parts of the bill that demonstrate the erosion of our personal liberties and the free market system as we know it.

Big Labor: Dismantling the Free Market System

Under the American Financial Stability Act of 2010 (S 3217), several provisions tucked away in the bill will give labor bosses unprecedented powers that, especially if abused, could threaten the very structure of our free market system.

• Financial institutions and other covered businesses could be required by law to give labor unions “Proxy Access”, enabling union bosses to potentially abuse the system to force unrelated agenda items, like unionizing the firm’s employees, before the shareholders
• New regulations will control how board of director elections are conducted – at private corporations!
  • The SEC would be granted the power to force the names of outside nominees onto the corporate ballot (as reported by Politico)
  • Directors running in an uncontested election would now be required to win a majority of votes cast, rather than only by the current plurality(as reported by Politico)
• Similar rules will also determine whether an individual may serve as both the CEO and Chairman of the Board -  at a private corporation!
• Government and labor unions will have “say on pay” for the annual salaries and bonus compensation of executives and other employees.  Essentially, like Obama himself, they can determine at what point “someone has made enough money”

I don’t think anyone’s against shareholders having their proper say and representation in the corporate management process.  But that’s not really what’s behind these pieces of the legislation.  We’ve seen how today’s labor bosses are abusing their powers and using the shareholder resolution as a hostage weapon to bully corporations into unionization and special union concessions. Just read my prior post, “SEIU’s Secret Weapon: If Obama’s Plan Fails, Brandish the Shareholder Resolution” for a taste of that tactic.

It’s been known for some time that labor bosses are now organizing on a  global scale, and as such, have taken to the Participative Management style common in European workplaces.  In the U.S., private corporations might typically achieve a similar democratic process of employee participatory management when the company enters into a direct employee ownership plan.  The difference here however is that we’re talking about companies that do not belong to the labor unions – these are companies in which the union might have a pension fund investment, or perhaps some of its workers unionized on premise.  These are private companies that the unions attempt to overtake through such smaller connections to earn a place on the board, and then change it from the inside out until a Participative Management environment is achieved.  If  that achievement were to occur, US corporations would quickly fold and restructure under a more socialist model.  Eventually, the free market system would erode away as labor unions take over the boards of once privately owned corporations.

For weeks now, Ive been searching for the resources to help me describe this threat in simple terms, and just as fate would have it, my friend Peter List over at LaborUnionReport and RedState pens the perfect post describing this with clarity and precision, in his post titled “Changing America Forever: Behind the AFL-CIO’s Push for Financial Reform.”

Big Government: Power, Control and Everlasting Entitlements

• A new agency, the Consumer Financial Protection Agency, or CFPA, would serve as massive bureaucracy that would control everything from defining the types of loans consumers may be permitted to purchase, to expanding redlining provisions and subsequent mortgage entitlement programs.  (And let’s not forget that the head of this agency would be Eric Stein, who ran the Center for Responsible Lending, and before that worked at Fannie Mae)

• The CFPA’s authority goes far beyond banks or financial institutions. This new bureaucracy would have the power to regulate hundreds of thousands of businesses.  Examples of small businesses that would be subject to CFPA oversight (as outlined by the US Chamber of Commerce):
  • A nonprofit organization that provides financial literacy education
  • A software company that creates products to help consumers manage their money
  • An advertising company that provides services relating to financial products
  • Utilities companies, retailers and even doctors that extend credit to their customers.

• The Consumer Financial Protection Agency, or CFPA, created in the bill would be housed within the Federal Reserve, an already secretive and unchecked force of power in our financial system that insists on going unaudited
• A government agency will have unlimited executive bailout authority, including the power to pick and choose which companies are saved and which are left to fail.  This creates serious potential for abuse, as private corporations could literally live or die based upon political decisions
• This bill contains the same language used by groups like the Center for Responsible Lending in the redlining laws and changes to the Community Reinvestment Act in 1995 for special research centers and programs “that promote awareness and understanding of the access of individuals and communities to financial services, and to identify business and community development needs and opportunities”

And we all know what happened as the result of those redlining laws and subsequent CRA changes in 1995.

Big Banks:  Empowered by Big Government, Become Big Brother

Finally, in order to justify all these entitlement programs, all this forced unionization, all this takeover of private companies’ boards of directors, the government needs research.  Not to worry, the bill creates vehicles for that, like the “Office of Financial Research” and a national database for the collection of your personal bank account and loan information, and various deposit account data.

Fannie Mae and Bank of America will be so thrilled when this passes the Senate (as will ACORN and SEIU).  Thanks, of course, to years of lobbying by organizations like the Center for Responsible Lending.  After all, they pioneered the use of banking research to mandate mortgage entitlements.  Just imagine all the new entitlements that will be created once they can analyze all of that *new* banking information and data on what we’re purchasing.  Someone will find some injustice somewhere in there.  You can count on that.

If you haven’t been as interested in all the complex language about things like financial derivatives and credit default swaps in this bill, then all of this above should be plenty for you to be concerned about.

No one knows how the police or Bank of America were informed of the protest, as the event coordinators had not sent such a notification, nor had they filed for a permit with such a small number of attendees.  Further, the event was only scheduled the prior day.  Nonetheless, the bank was obviously prepared enough to have beefed up their security staff and hired the extra guards.

All that, for this peaceful bunch of patriotic citizens, there only to exercise their 1st amendment rights and express their discontent with the out of control bailouts and Big Brother environment created by the marriage of Big Government and Big Banks.  The financial reform bill only makes that environment even worse.  So they had something to say about it.

Sure, officers and security guards have every right to direct citizens away from private property and onto the public property boundaries.  Standing there in a line however, and hovering in the corner  in numbers that outweigh that of the protesters themselves only creates a chilling effect on 1st amendment rights like free speech and the right of the people to peaceably assemble.

If you don’t like what’s going on in this country, you have a chance to speak out about it yourself.  Attend NCFreedom’s statewide rally tomorrow,  May 12th in Raleigh, NC, where some of these very protesters will be exercising their 1st amendment rights, again.

That’s what happened when one such group of protesters descended upon the Bank of America headquarters on Saturday, May 8th.  The group showed up around lunchtime, eager to protest the financial reform bill currently making its way through the Senate.  Upon their arrival, not only were they met by three Charlotte police cars and a couple of local officers, but evidently Bank of America had somehow caught wind of the event and sent out another six or so Bank of America paid security staff. As an extra precaution, the bank had also hired at least two Wackenhut security officers to augment their usual staff.  Apparently, Bank of America felt it necessary to prepare for some sort of pending siege – these are Tea Party protesters we’re talking about here.  According to our own members of Congress and their allies, they’ve deemed Tea Partiers, the very constituents they are supposed to represent, a violent, racist bunch of potentially unstable people.

Well, when I heard about the incident, I couldn’t wait to get a look at these dangerous rabble-rousers.

So this is the riot mob that Bank of America sent out its security force, including extras from Wackenhut, to aggressively resist.

Meanwhile, these protesters showed up simply to draw attention to Bank of America’s role in trying to influence the current financial reform legislation.  In North Carolina, Bank of America has a special place in the heart of Democratic Senator Kay Hagan, who has been pushing an amendment to the bill on behalf of the giant bank.  (Coincidentally, it also benefits another of the Senator’s AND Bank of America’s favorites, the Center for Responsible Lending…but that’s for another post).

Hagan, a former Vice President with Bank of America who oversaw subprime lending programs there, has proposed the amendment under the guise of “protecting consumers”, but when Bank of America is a staunch supporter of the legislation, it’s easy to be suspicious of anyone’s supposed good intent.

Hagan’s amendment would control the types of financial products that you as a consumer would be permitted, under federal law, to purchase.  It will limit consumers to no more than six and as few as one loan per year during a 12-month period for “covered” loans – those include anything from car title loans, installment loans, and payday loans to even some retail company credit plans.  For instance, if you purchased a large appliance from a department store or home improvement center and financed it through store credit with a payment plan of installments, you might be literally barred by law from purchasing another appliance in that same 12-month period if you intend to pay for it through installments on another company credit plan.

To enforce these controls, the government would create a national database to track the loan products that ordinary citizens are purchasing, and would require certain lending institutions – including banks, mortgage lenders (except for Fannie Mae and Freddie Mac, which are both exempted from the bill), car dealers, retail companies that offer credit plans, and even some doctors and dentists – to comply by providing information about you, your loans, and your bank account details to a bureaucratic agency managing the database.

So it’s no wonder local Tea Party, 912 Project groups, and other liberty-minded activists in the Charlotte area tried to pull together a spontaneous grassroots protest at the Bank of America headquarters there.  Upon learning of the amendment and the bank’s support of it, they gathered this past Saturday to draw attention to the amendment, and to the bill in general.

While it was a small gathering, the group arrived with signs and attempted to draw attention to their message from passers-by.  Since the bank was actually open for business, many people were going about their business in and out of the building.  Protesters said the local Charlotte police almost even seemed embarrassed and surprised at the show of force from bank of America. They were courteous to the group and even sent some of their officers back to the station after it was obvious the group posed no threat to the property or to any people.

However, Bank of America security, including the Wackenhut officers, saw it differently.

Protesters describe being spoken to by Bank of America guards with contempt.  They were immediately told to leave the premises, even though the bank was open for business and they’d stayed out on the sidewalk area.  Instead, the security detail then stood them down in a single file.  We’re receiving video and photo as of this writing but it’s almost comical to see the initial visuals, because their show of force actually outnumbered the number of protesters.

After some not-so-friendly direction given them by one of the plain clothes security officers and then a Wackenhut officer, the protesters moved to a different area of the property location, where the boundary line between private and public property was demonstrated for them.  They cooperated without issue and proceeded to simply stand in the designated area with their signs.  Meanwhile, they describe the security detail as angrily watching over them and treating them as though they were common criminals, while passersby looked on.  One plain clothes security officer got on his cell phone and spoke most of the time with an unidentified party, seemingly giving a play by play description of the protesters and their activity.  In viewing some of the initial photos we received, the man clearly wasn’t happy.

The incident is especially interesting because it’s in such stark contrast with similar protests by left wing activists and labor unions.  Take, for example, these photos from other Bank of America protests, where security, if present at all, simply stepped aside and went about their business.

There’s no question that Tea Party, 912 Project groups and other activists who stand for the Constitution and against overreaching government are portrayed by this administration unfairly, and certainly not treated with the same respect and fairness that labor unions and progressive activists enjoy.  That’s because while Democrats and left wing groups have made it a central theme of their platform to demonize companies like Bank of America, chanting slogans like “End Corporate Excess” and “Main Street Not Wall Street,” the truth is that behind the scenes the two are bedfellows on the same side.  After all, Bank of America and many of the other big banks actually support the financial reform bill. And Democrats like Kay Hagan are reeling in the big bucks in donations from the very banks from which they claim to be protecting us helpless consumers.  That’s why it’s no surprise that the financial reform bill has moved so quietly through the legislative process.  If Democrats draw too much attention to it, opposing grassroots activists might take notice.  Instead, they’ve relied upon labor unions and Organizing for America to distract us all from that reality, with their dramatic stunts like “Showdown on Wall Street“, and “Bust up Big Banks” rallies.

Unfortunately, it’s a strategy that’s worked, because the Tea Party grassroots have all but been asleep on this issue.  At least, until now they were.

“I can’t believe people haven’t been aware of this bill and some of the things that are in it. It’s a surprise to many of us – we didn’t even realize it was this close to coming up for the Senate vote.  We’ve been so focused on this statewide Health Care Repeal, that we almost missed the financial reform bill entirely.  Hopefully we have enough time to wake some folks up quickly enough to get engaged in this before it’s too late,” explained David DeGerolamo, a Tea Party and 912 Project organizer from North Carolina who built NCfreedom.us, a statewide coalition and website under which many of the local and state patriot groups could organize and coordinate while still maintaining their independence.

“We need to get these people back to the principles of the constitution that made this country great.  It’s about freedom of enterprise, not government intervention into enterprise.  The government is solely the problem in just about anything that has a problem.  Almost anything that’s wrong can be traced right back to the big fingerprint of the government.”

DeGerolamo was also referring to another statewide effort underway in the state of North Carolina, related to the recently passed Health Care legislation.  On May 12^th, State Senator Debbie Clary will introduce legislation that would exempt citizens and businesses of North Carolina from participation in any federally mandated health care.  According to NCfreedom, twenty-two states have so far filed lawsuits against the health care mandate.

The group is hosting a huge statewide rally on May 12^th, where at least twenty grassroots groups from across the state of North Carolina will march on the general assembly building and peacefully demand that the bills be brought to the floor for a vote. And after this weekend’s incident at Bank of America, he’s decided to expand the topic to the financial reform legislation as well so that the grassroots groups are aware of the importance of the legislation and its constitutional impact on the rights and personal liberties of American citizens and our free enterprise system.

Given the discovery that even many doctors and dentists who accommodate payment plans for their patients may be regulated under this financial reform bill as well, the expansion seems that much more appropriate.

And going back to the protest at Bank of America’s building for a moment, one quick video clip will sum up the story well.

As the protesters began to wrap up their exercise and stood alongside the bank looking on from the sidewalk, four or five kids began riding their bikes and doing tricks in front of the bank, right in the exact same spot from which the protesters had just been chased away for being on private property.  I guess they weren’t as threatening as that crazy, violent bunch of Tea Party protesters.

I think after this Bank of America incident, it’s clear that our rights are being eroded faster than most of us can keep up with.  After all, how many of you have been asleep for this financial reform bill?  But this wakeup call’s come just in time for NCFreedom’s statewide rally on May 12^th in Raleigh, NC.   I have the feeling the Raleigh event has probably just become Tea Party and grassroots central – the hot ticket event for this week.

If you’re anywhere near North Carolina, you can learn more about it here.   BigGovernment editor Mike Flynn has also just been invited to speak at the event.

Stay tuned – we should have some video posted on the Bank of America incident shortly.  I’m not sure whether it will tick you off, or make you laugh, but it will probably do both.

Recently, people have started to notice that government employees, especially federal employees are starting to make more money than private sector employees. USA Today reported in March that federal employees had salaries of over 12% more than private sector employees in 2008. And, this noted that the benefits were even higher:

These salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis.

One would think that with regulators failing or watching porn and the public’s estimation of government at an all-time low, Congress would be interested in doing something about this. Not Chris Dodd or the Democrats. Instead, his financial regulation bill actually creates a whole office full of government bureaucrats with unlimited salaries. Let’s look at the text of Section 152 (d).

(d) OFFICE PERSONNEL
(1) IN GENERAL
—The Director, in consultation with the Chairperson, may fix the number of,
and appoint and direct, all employees of the Office.

This means that the Director of the Office of Financial Research picks the size of the department, not Congress. And their pay is set at the discretion of the office, not subject to the rules governing civil servants.

(2) COMPENSATION
—The Director, in consultation with the Chairperson, shall fix, adjust, anadminister the pay for all employees of the Office without regard to chapter 51 or subchapter III ofchapter 53 of title 5, United States Code, relatingto classification of positions and General Schedule pay rates.

Let me make sure I get this right.

The regulators fail. So you give them more power and unlimited salaries?

The activity surrounding the controversial Consumer Financial Protection Agency (CFPA) in the financial reform legislation is really picking up these days.  But many Americans would never know it.  It seems Democrats may have learned something from the experience of the health care bill after all.  In their efforts to avert a repeat disaster of losing control of the message, they appear to be taking every step necessary to ensure that the public engages as little as possible in this debate.

But I assure you, this is a debate that the American public should engage in, pronto.

Because behind the scenes, certain lobbyists are quietly but aggressively scurrying about, pushing hard for the passage of the CFPA in a power grab by the Executive Branch that would dwarf the Health Care Reform bill and the Patriot Act.  And with the passage of the proposed CFPA, one man in particular with a history tied to some of the deepest tentacles in the financial crisis – and to the Community Reinvestment Act changes of 1995 – would gain the power to selectively manipulate the entire landscape of the financial, small business and housing markets.

Last week, we reintroduced you to an early trigger in the financial crisis, with good reason. In “Death by Senator: As Financial Reform Looms, We Revisit IndyMac,” we revisited the role that Senator Chuck Schumer’s (D-NY) very public letter played in the fall of one financial institution.  As I ended that piece, I teased that there was more to the story that would soon follow.

So, let’s pick up from June 30, 2008.

Merely days after the now infamous Schumer letter triggered a run on the bank that would total over $1.3 billion, this lengthy and scathing report was released to the public:

The report, written by the left-wing Center for Responsible Lending (CRL), condemned IndyMac’s lending practices.  The conclusions in it were drawn entirely from statements by laid-off IndyMac employees and consumer advocacy trial attorneys with active lawsuits against the lender, which drew a great deal of criticism and sparked cries of bias within the industry.  Nonetheless, the general public connected with that report and it drove the last nail into IndyMac’s coffin, further poising CRL as the champion for – and direct beneficiary of – federal financial regulation.

In addition to the timely coincidence of the CRL report having released almost in concert with Schumer’s letter, the fact that it came from CRL is even more curious.

This is an organization that is no stranger to Capitol Hill. Democrats have invited CRL to testify before Congress on a multitude of occasions.

And frequently among those guests invited from CRL to testify has been… Eric Stein.

A staunch proponent for social justice in affordable housing and payday lending, Stein had long been the President/SEO of CRL’s parent network, the Center for Community Self-Help.  For over 30 years, Self-Help has billed itself as a non-profit organization that serves the interests of minorities and the disadvantaged by financing loans and investing in real estate development in “low-wealth communities.”  In parallel, Stein had also served as Senior Vice President of CRL, which serves as the research and policy arm to Self-Help.

Stein’s biography also illustrates other positions that may have been beneficial relationships for CRL, including his employment with Fannie Mae, and an employment stint with Congressman David Price (D-NC).  Incidentally, Congressman Price has received nearly $5 million in federal grants for Self Help Ventures Fund, one of Self-Help’s many affiliates, located in the same district.

Stein was also a member of the Community Development Advisory Council of the Federal Reserve Bank of Richmond.

So, where is Eric Stein today?  Working in the United States Treasury Department, and gearing up to head the CFPA.

In early 2009, President Obama appointed Stein to the newly created position of Deputy Assistant Secretary for Consumer Protection, where Stein has been key in writing the consumer protection language in the proposed financial reform legislation. He is also in charge of designing the dually proposed Consumer Financial Protection Agency.  Should the bill become law, Stein is expected to head the new agency, which will have immense powers that extend far beyond mortgages and financial investments.

That’s a lot of power to be held by one unelected official.  Especially for one so closely tied to an organization that stands to benefit immensely from this new agency and the legislation behind it.

So, what do we know about this organization with which Stein has spent so many years of his career?

We first introduced the Center for Responsible Lending to you a few weeks ago, but let’s take a closer look at the organization and its parent, Center for Community Self Help.

The Center for Community Self-Help:  Born From the CRA

After the Community Reinvestment Act (CRA) was passed in 1977, most of its implementation began rolling out around 1979.  And in 1980, the Center for Community Self Help was founded with its focus on serving the very market that was now the beneficiary of the new redlining laws. Soon after, Self-Help joined with Fannie Mae to establish a program for borrowers who were underserved by banks in the primary market.  With this new secondary market underway, it was Self-Help that collected all of the information from Fannie Mae’s borrowers, tracked their loans, and produced analysis that was then used to put pressure on the larger banks to issue more loans to underserved communities.  As Deborah Momsen-Hudson, Vice President & Director of Secondary Marketing, put it, “We’re an R&D lab for the financial industry.”

In direct response to the research produced by Self-Help and Fannie Mae, the CRA laws were subsequently expanded in 1995 to establish quotas for issuing mortgages to residents of underserved communities and to levy fines against lenders that did not meet those quotas.  The new laws also required institutions to offer ATMs and local branch services in areas that were previously considered low usage, high risk areas for crime.

But as always, there were unintended consequences.

Peter Wallison has written an excellent analysis of how the unintended consequences of the 1995 changes to the Community Reinvestment Act laws greatly contributed to the financial crisis:

Together, the tighter CRA requirements and the affordable-housing regulations imposed on the GSEs substantially reduced the standards that had to be met to qualify for a mortgage. The number of CRA loans was not large, but they required banks to devise ways of lending to people who would not previously have qualified for a mortgage. Once Fannie and Freddie began accepting loans with low down payments and other liberalized terms, the same unsound standards were extended to borrowers who could have qualified under the traditional underwriting standards. In addition, federal regulations encouraged bank lending for housing in preference to other lending, and tax policy favored borrowing against (and thus reducing) the equity in a house.

These policies were effective in the sense that they achieved some of the intended results. Between 1995 —when lending quotas based on the CRA became effective—and 2005 , the proportion of American households that owned their own home rose from 64 percent, where it had been for about twenty-five years, to 69 percent (Vlasenko 2008 ). A measure of the unintended results of federal policy, however, is that home prices doubled between 1995 and 2007 ; and that the housing bubble was composed—to an unprecedented degree—of subprime and other nonprime and risky loans. Banking-capital regulations and the deductibility of interest on home-equity loans made a crisis inevitable once this housing bubble collapsed.

Coincidentally, these were – and remain – the very markets that Self-Help serves and the very services that Self-Help offers.  The regulations that Self-Help lobbied to bring about delivered for them fruitful gains, as the pool of secondary mortgage customers exploded, and the demand for short-term lending and easy access to cash and ATM services skyrocketed.  Hence, the Self-Help network expanded from mortgage lending to Credit Unions, short term lending, real estate development, and the financing of community facilities, such as schools, non-profits, and day-care centers.

And it’s a model upon which our government has based an entire entitlement program.  In 1994, President Clinton modeled the Treasury Department’s Community Development Financial Institution Fund after Self-Help’s lending plans.

The Center for Responsible Lending:  Crisis Creator?

After the successful results gained by Self-Help’s research in the 1990’s, the parent network expanded to include a designated research and policy arm, The Center for Responsible Lending.  Founded in 2002, CRL is “an affiliated nonprofit research and policy organization dedicated to curbing predatory lending.”

Much like the Center for American Progress is the think-tank that provides all the research to support the left-wing agenda, CRL serves that same role for the left specifically for matters concerning the financial and real estate industry.  Their research papers pool data from other liberal sources and are often aided by the canvassing and mobilizing efforts of establishment left-wing groups like ACORN and organized labor.  Just as in the Health Care “crisis”, their reports often seem to be cleverly timed to coincide with certain events to force a particular policy issue or create a financial or housing equality “crisis”, and at times may even be aided along by Washington insiders.

Case in point:  IndyMac.

The Self-Help Money Machine

Under Eric Stein’s leadership, Self-Help and CRL have certainly expanded quite a bit, reaching their tentacles into a multitude of different areas.  Spreading out from beneath this primary partnership of the two flagship organizations, there is a structure of at least 10 major affiliates, and another 37 sub-affiliates, consisting of an entire network of credit unions, mortgage and short-term lending, venture funds, real estate development companies, and investment companies.  Couple that with a slew of paid lobbyists (some of whom have worked for Congresswoman Jan Schakowsky), and maybe you’ll wonder too why a non-profit like Self-Help would require such sophistication.

The primary source of funding behind Self-Help and CRL since its inception has been non other than the notable subprime/Alt-A loans king and queen, Herb and Marion Sandler.

You may recognize the Sandlers from their various philanthropy projects like the Center for American Progress, and various media outlets, as well as their investments in groups with other notable investors like George Soros.  Or maybe from the SNL skit they ordered off the Internet.

But the Sandlers’ most relative and probably best-known investment was California headquartered GoldenWest Financial/World Savings bank.  The couple are said to have made off with $2.3 billion in cash after they sold off World Savings bank to Wachovia in 2006.  Shortly thereafter, Wachovia collapsed from the weight of the toxic loans that had been bundled up into World Savings’ portfolio, far from the sunlight of peering eyes.

In fact, the Department of Justice and the Securities and Exchange Commission are both investigating claims that Golden West/World Savings lied about the quality of its loans to its investors and broke the law by fraudulently luring customers into loans they could never afford.

Self-Help and its CRL affiliate may seem like one of those charitable do-good organizations that is improving communities all across America and lifting Americans out of poverty thanks to the generous funding of benefactors like the Sandlers.  But the reality is, the faces of the corporate elite may often be masked behind well-intended (and sometimes not so well-intended) do-gooders.

We must always do our due diligence and at least ask the question:  Is it possible that there are ulterior motives at play here?  Is the Self-Help network a sincere collective of honest do-gooders?  Or do they have a vested interest in seeing a repeat of the financial reform of the Clinton years, only this time on steroids?  Look at their competitors and think about which organization the new CFPA would favor.

Needless to say, we should be asking the same of Mr. Stein, the current Treasury executive who ran this organization for so many years, who worked for Fannie Mae, who worked for a Congressman who coincidentally secured millions in funding for Self-Help, who has appeared frequently before Congress to push for financial regulation, and who is now just one heartbeat away from controlling the engine of our entire nation’s economic system.

All this, and still, we haven’t even scratched the surface on this story yet.  Continue to stay tuned…

From a Senate Banking Committee press release

“It is the job of this Congress to restore responsibility and accountability in our financial system to give Americans confidence that there is a system in place that works for and protects them,” Dodd said at the press conference.  “We must create a sound foundation to grow the economy and create jobs.”

The problem is that the big government approach to the financial regulatory reform effort may harm economic growth and grants sweeping new political powers to the Federal Reserve over monetary policy.  The big ticket item for the legislation is the creation of a new federal bureacracy called the “Consumer Financial Protection Agency.”   The discussion draft of the legislation describes the new agency as “an independent watchdog to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, while prohibiting hidden fees, abusive terms, and deceptive practices.”    The fact of the matter is that this new government entity distracts freedom loving Americans from many other disturbing aspects of this bill that will grow government and harm economic prosperity.

The discussion draft “prevents excessively large or complex financial institutions from bringing down the economy” by “creating a safe way to shut them down.”  They create a “Agency for Financial Stability” to be government entity to replace the free market forces.  If these banks fail, they will avoid a bankruptcy proceeding, like any other business, and their creditors and trading partners will be bailed out by the federal government.  If you liked the Bailout of Wall Street, then you will love this legislation because it makes permanent a mechanism to place these private entities into a federal receivership (government control) then bail out the people doing business with them under the promise of the cost “ultimately be charged to financial firms.”  A senior Senate staffer on financial service issues tells Big Government that this provision “treats financial companies different from everybody else – everybody else has to go to bankruptcy.”

Another objectionable provision would give control of the Regional Federal Reserve Banks to the Chairman of the Federal Reserve.  Sources in the Senate tell Big Government that this provision grants Chairman of the Federal Reserve Ben Bernanke “more political influence over monetary policy.”  Sources say that “if you are not going to abolish the Fed, the changes that they make to the regional Fed Board undermine the part of the fed that works the best.”  Currently regional board members of the Fed do not answer to the Chairman of the Fed.  Usually the “dissenters to easy money are regional Presidents,” because they are independent.  The reform in this bill would give control of the regional Feds to  so called reforms that “will concentrate power in Bernanke.”  The bill might take away some regulatory power from the Fed, “but (the bill) gives the Washington Fed more power over monetary policy.  The grave danger is that ” Bernanke lackeys” will be running monetary policy.  John Taylor, Professor of Economics at Stanford University, argues that the “loss of Federal Reserve independence is a serious problem, especially at this time of rapidly increasing Federal debt and a greatly expanded Federal Reserve balance sheet.”

There are many objections to the Dodd approach to financial regulatory reform for those that believe in the free market and love freedom, but these provisions mentioned rise to the level of the most objectionable.  Financial regulatory reform will create a massive new bureacracy, grow government and make politicians feel better, yet the true effect may be to make our financial sector more insulated from free market forces and give unelected bureacrats the power to run banks and financial services companies.  Dodd’s Big Brother for Wall Street approach to financial services reform may do more harm than good for capitalism and economic growth.