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Equal Credit Opportunity Act
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F
ederal regulators and lenders
convened Nov. 6-9 in
Baltimore to review and ana-
lyze whether the goals of the
nation’s
Community
Rein -
vestment Act (CRA) and fair lend-
ing laws are being observed. The
annual event, now in its 15th year,
attracted sell-out attendance to
hear a series of expert presenters’
insights
and
analyses.
For Assistant Attorney General
Thomas E. Perez, the annual collo-
quium became the occasion for a
keynote address that reminded the
audience that for communities of
color, fair lending remains elusive.
“Regrettably, we have found” said
Perez, “that all too often borrow-
ers are judged by the color of their
skin rather than the content of their
creditworthiness.”
As head of the Department of
Justice’s Civil Rights Division
since October 2009, Perez noted
that more than half of the 2010
referrals received from other fed-
eral lending regulators involved
discrimination on race or national
origin.
Through the creation of a dedi-
cated Fair Lending Unit at DOJ,
over $30 million in direct compen-
sation for individuals whose rights
were violated has been secured.
Also in 2010, the unit reached set-
tlements or filed complaints in 10
pattern or practice lending cases.
Of these ten cases, nine have been
r eSPOnSible l ending
Charlene Crowell
settled
since
last
year.
Much of this enforcement, accord-
ing to Perez, is accomplished in
collaboration with the President’s
Financial Fraud Enforcement Task
Force. With representatives from
DOJ and other federal agencies, as
well as state attorneys general and
local law enforcement, the task
active investigations involving
redlining claims, pricing discrimi-
nation, and product steering based
on race or national origin.
In an effort to address the devasta-
tion of neighborhoods and home
values, the Civil Rights Division is
including innovative provisions to
address the full scope of damage
done, in addition to settlement
terms stipulating more traditional
remedies such as a marketing cam-
paigns or establishing a physical
presence in under-served commu-
In an effort to address the devastation
of neighborhoods and home values,
the Civil Rights Division is including
innovative provisions to address the full
scope of damage done
force investigates and prosecutes a
wide range of financial crimes.
“Without a credible enforcement
program,” said Perez, “we can
never achieve full compliance
with the law or fully level the
playing field between responsible
lending institutions and unscrupu-
lous lenders.”
In 2011, a record number of
cases have been filed under the
Equal Credit Opportunity Act.
Currently, there are seven author-
ized lawsuits and more than 20
nities.
For example, in a St. Louis set-
tlement with Midwest Bank, the
decree calls for assistance to help
residents repair their credit and
provide access to low-cost check-
ing accounts. Similarly, in the met-
ropolitan Detroit decree with
Citizens Bank, the lender must
provide home improvement grants
to current homeowners living in
neighborhoods hard-hit by fore-
closures. Both Citizens and
Midwest agreed to find solutions
that would allow them to remedy
the harm done while also reaching
new customers.
In cases where African-Ameri -
can and Latino borrowers were
charged more than similarly quali-
fied white borrowers, the Civil
Rights Division examined loan
origination practices, guidelines
on how fees or interest rates were
set, and whether there was any
documentation to explain differ-
ences in prices.
Summarizing goals for both cur-
rent and future efforts, Perez
called for transparent transactions,
prompt decisions, fair lending, and
open communication with all bor-
rowers.
“It is the stubborn persistence of
race as a factor in the pricing of
loans” concluded Perez, “even
after you account for relevant
creditworthiness factors that we
seek to address through our
enforcement actions. The disparity
grows as you move up the credit
score ladder. All too frequently,
equal credit opportunity remains
elusive for minorities, even upper-
income minorities who are credit-
worthy.”
Charlene Crowell is a communi-
cations manager with the Center
for responsible lending. She can
be reached at: Charlene.crow-
ell@responsiblelending.org
No Supercommittee Deal is the Best Deal
A
lthough automatic cuts in
defense spending and
domestic programs are
scheduled to go into effect as a
result of the congressional super-
committee’s failure to reach a
budget deal by Wednesday, those
reductions are far better than what
Republicans on the committee
were proposing and Democrats
were willing to accept.
According to the Congressional
Budget Committee, defense
spending will be slashed automat-
ically by 10 percent in January
2013 while domestic programs
will be reduced by 7.8 percent.
Additionally, Medicare spending
will be lowered by 2 percent.
Exempted from the automatic cuts
are Social Security, veteran bene-
fits, Medicaid and certain low-
income programs.
“No deficit deal is better than a
bad deal, and a bad deal may be
the only kind this committee can
reach,” Orson Aguilar, executive
director of the Greenlining
Institute, said as it became clear
the committee of six Democrats
and six Republicans would not
come to an agreement. “As we
reported this summer in our study,
‘Corporate America Untaxed,’
nearly all of the deficit reduction
goal can be achieved by closing
down offshore corporate tax
havens and making the richest
companies pay their fair share.
There is no need to devastate vital
programs for the elderly and other
vulnerable Americans.”
The goal of the supercommittee,
formally known as the Joint Select
Committee on Deficit Reduction,
was to reduce the budget by $1.2
trillion over the next 10 years. As
an incentive to complete a deal, an
Page 4 The Portland Skanner november 23, 2011
T He C urrY
r ePOrT
George E.
Curry
automatic trigger was set go into
effect if the committee failed to
reach that goal, slashing an equal
amount from military and domes-
tic spending. Under the most pro-
gressive GOP proposal, if it can be
called that, Sen. Patrick J. Toomey
(R-Pa.) offered $300 billion in
als were to the right of the
Simpson-Bowles plan of last year,
with minimal revenues and as
much as $600 billion in cuts to
Medicare and Medicaid, the
Greenlining Institute noted.
Greenlining, a multi-ethnic pub-
lic policy and advocacy group,
wrote to the committee in August
stating that simply closing off-
shore tax havens could reduce the
deficit by as much as $1 tril-
lion. One of its studies showed
that by using offshore tax havens,
major companies such as Exxon
and General Electric pay far less
of their income in taxes than the
average American, and in some
cases no taxes at all.
Nearly all of the deficit reduction goal
can be achieved by closing down
offshore corporate tax havens and
making the richest companies pay
their fair share
new taxes, a far cry from an equal
split between spending reductions
and new tax revenue favored by
Democrats.
What is more disturbing is that
Democrats on the committee were
willing to make concessions that
would hurt their core constituents.
They offered a proposal to reduce
deficits by $3 trillion over 10 years
that included $500 billion of sav-
ings in health care programs, high-
er Medicare premiums, and a new
form of indexing inflation that
would reduce cost-of-living
adjustments for Social Security
beneficiaries.
The compromise deficit propos-
Unlike Democrats, Republicans
have been steadfast in supporting
their base, which includes the
wealthy and major corporations.
According to Citizens for Tax
Justice, 52.5 percent of the Bush
tax cuts go to the richest 5 percent
of taxpayers. The Treasury
Department reports that extending
the Bush tax cuts to the top 2 per-
cent of taxpayers will cost $678
billion over the next decade.
GOP leaders refuse to consider
letting the Bush tax cuts expire. In
a concession to Republicans last
year, President Obama broke a
campaign pledge by agreeing to
extend the tax cuts beyond their
original expiration date. He made
that agreement in exchange for
Republicans extending unemploy-
ment benefits and the payroll tax
cuts.
There is broad public support for
requiring the wealthy to shoulder a
fairer share of the tax burden.
In an October Washington Post-
ABC News poll, three-quarters of
Americans backed a tax hike on
millionaires. A Washington Post-
Bloomberg News poll that same
month found that more than two-
thirds supported raising taxes on
households earning at least
$250,000.
The committee seemed doomed
from inception, evenly divided
with no member willing to break
party ranks. The supercommittee’s
inability to reach a deal marks the
third high-profile budget failure
over the past 12 months, following
a bipartisan deficit commission
and unsuccessful talks last sum-
mer between President Obama and
House Speaker John Boehner.
The decision to invoke automat-
ic spending cuts as part of raising
the national debt limit in August
was intended to pressure Congress
into making tough budget cuts.
But now that it didn’t happen both
Republicans and Democrats are
looking into ways to come up with
another gimmick that will again
postpone making tough decisions.
Republicans
conveniently
ignore that fact that the deficit
problem was caused by a combi-
nation of two George W. Bush
wars, a poor economy and two
Bush tax cuts. When Bush
assumed office, he had a $128 bil-
lion surplus. Bush, on the other,
ran up deficits every year he was
in office.