Skip to comments.Maxine Waters’ “Diversity Committee” May Pressure Banks Into Making Bad Loans
Posted on 02/07/2019 11:31:54 AM PST by SeekAndFind
Rep. Maxine Waters, D-Calif., has a habit of redoubling her efforts when her ideas fail. Thats especially true given that she now chairs the House Financial Services Committee. One of her top priorities is bullying banks into boosting mortgage lending to marginally qualified borrowers based on race or ethnicity. And her main vehicle for that now is a proposed subcommittee on diversity and inclusion. In a prepared statement on January 30, she declared, I am proud to say that this will be the first Subcommittee of its kind in Congress.
One hopes it will be the last. For if she gets her way, the outcome, taken to its logical conclusion, may be a financial meltdown rivaling the one a decade ago.
When it comes to dysfunction on Capitol Hill, Maxine Waters lives it. In her nearly 30 years in the House of Representatives, she has displayed a clear pattern of demagoguery and self-dealing. Only weeks after President Donald Trumps inauguration, she already was calling for his impeachment. Despite having no evidence of his misuse of office, she has not let up. Last June, she egged on young adults to surround and harass Trump administration officials spotted in public places. At least three times she has been cited by Citizens for Responsibility and Ethics in Washington (CREW) in the groups annual list of the most corrupt members of Congress.
In short, Maxine Waters is emblematic of whats wrong with our political culture. But now shes got new opportunities. The midterm elections of last November restored the Democratic majority in the House lost eight years earlier. The changing of the guard gave Maxine Waters the chairmanship of the House Financial Services Committee. Its her home base. She has served as ranking member or chairman of one subcommittee or another under its jurisdiction since 1995. The committee has the authority to ride herd on banks and other financial intermediaries, plus a wide range of federal agencies. Though she expresses a grudging willingness to work with Republicans, she emphasizes, I have the gavel.
Shes planning on using that gavel, too, especially to promote affirmative action. During her committees first markup session, Waters remarked: I have proposed the creation of a new Subcommittee on Diversity and Inclusion, which will be dedicated to examining diversity and inclusion issues under the Committees jurisdiction. Such circumlocution obscures her motive of forcing lenders to aggressively boost their volume of home loans to black and other nonwhite borrowers, regardless of creditworthiness.
The words inclusion and diversity, as we have seen too often in corporations, on college campuses and elsewhere, are anything but benign in practice. They rest on the assumption that social inequality by its nature is an injustice, and that institutions perpetuating it, consciously or not, must be made to pay. The notion of mortgage credit as an entitlement gradually had been established by the Clinton and Bush administrations, and by Congress during those years. Credit allocation directives contributed mightily to the tanking of the financial services industry during 2008-10. Various studies, among them by the Department of Housing and Urban Development and by the Federal Reserve, already had concluded than when controlling for various borrower and property characteristics, race does affect mortgage default rates. And whites had significantly lower rates than blacks or Hispanics.
Rep. Waters, like many of her colleagues, learned nothing. In mid-2010, during House-Senate conference sessions for the Restoring American Financial Stability Act (i.e., the Dodd-Frank Act), Waters helped shepherd into being the Financial Stability Oversight Council, which authorized the Treasury Secretary to review a troubled financial institutions importance as a source of credit for low-income, minority or underserved communities prior to any federal takeover. She also inserted an amendment (Section 342) establishing an Office of Minority and Women Inclusion at the CFPB, the Treasury Department, the Comptroller of the Currency, Federal Deposit Insurance Corporation and other federal agencies. To ensure tough enforcement, the law read: Each agency shall take affirmative steps to seek diversity in the workplace of an agency, and at all levels of the agency. That we recovered after 2010 while avoiding another mortgage collapse owes nothing to such mandates or the eternal wisdom of Barack Obama.
It may be more than misguided egalitarianism that drives Rep. Waters campaign. Affirmative action has been unusually good to her and her family. Back in 2008, she used her position on the House Financial Services Committee to win a $12 million bailout loan via the Troubled Asset Relief Program (TARP) on behalf of the dangerously undercapitalized minority-owned OneUnited Bank (OneUnited CEO Kevin Cohee initially had requested $50 million). The Boston-based banks board of directors at one time had included Waters husband, Sidney Williams, who would remain a prominent stockholder. As records showed, this community bank had made virtually no loans to its intended local beneficiaries. In 2010, Congresswoman Waters was cited for three violations by the House Ethics Committee for improperly arranging a meeting between officials of OneUnited and the Treasury Department. Though eventually cleared of wrongdoing, her behavior suggested the principle, Do as I say, not as I do.
The Great Recession of a decade ago resulted from what economists call moral hazard. Its a complex concept, but it boils down to this: People are more careless with other peoples money than with their own. An over-leveraged banking industry, having been pressured into complying with diversity mandates, was on the verge of collapse. Congresswoman Waters newest initiative might eventually lead to history repeating itself. This congresswoman isnt simply inviting moral hazard; she is a moral hazard.
They did that already. The interest only loan burst is still having ripple effects. Toxic loans are toxic.
By golly, that was soo much fun the last time we did it, this MORON wants to repeat it.
“But this time it’s different.”
Or does she even bother with a fig leaf?
Another keynsian community reinvestment act. They won’t learn because they do not have any actual skin in the game. Rather the skin they do have in the game is protected by insider trading type information.
Nothing is too stupid for a Leftists to not try it again and again.
This is how they collapsed the economy the last time, through the Community Reinvestment Act which forced banks to make many billions of dollars of bad loans.
That’s what created the mess in the first place!...................
Make loans to people in certain neighborhoods or we’ll charge you with ‘red lining practices’.
So, you then Make loans to people in those certain neighborhoods and they charge you with ‘Predatory loan practices’..............
Nope, the Mortgage Crisis wasn’t Bush’s fault. Go back FURTHER.
Hey, Rocky, watch me pull a mortgage out of my arse,
Generally, children believe adults have it made... have all the answers.. do it all right...
Then you grow up and realize they don’t know what they are doing and they are in charge...
"Its Deja-vu all over again" --Yogi Bara
So we will repeat the mistakes of the past, and expect different results?
So what’s up with this? You wait a few years, so people’s memories fade as to what happened during the last mortgage meltdown? Then you repeat the process???
And then she will be shocked, just shocked, if we have another crisis due to big defaults on new risky loans. Or she will claim it’s racist to foreclose and try to collect on bad loans.
I am sure this humble public servant is a multi-millionaire, why does Waters not start her own bank and make loans all day to people who can’t and will not pay the loans back?
It is good practice to not anger people who have billions of dollars at their immediate disposal.
People who do, tend to disappear..........................
Atlas ping, specifically Michael “Midas” Mulligan, Eugene Lawson, Lee Hunsacker and Judge Narragansett.
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