Maxine Waters’ “Diversity Committee” May Pressure Banks Into Making Bad Loans

Townhall ^ | 02/07/2019 | Carl Horowitz

[SeekAndFind]

Rep. Maxine Waters, D-Calif., has a habit of redoubling her efforts when her ideas fail. That’s 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 Trump’s 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 group’s annual list of the most corrupt members of Congress.

In short, Maxine Waters is emblematic of what’s wrong with our political culture. But now she’s 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. It’s 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.”

She’s planning on using that gavel, too, especially to promote affirmative action. During her committee’s 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 Committee’s 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 institution’s “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 bank’s 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.” It’s a complex concept, but it boils down to this: People are more careless with other people’s 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 isn’t simply inviting moral hazard; she is a moral hazard.

[2ndDivisionVet]

Loan originators dream of this stuff. I made a pretty penny when they did this before.

[moovova]

No kidding. The gubment will just bail them out.

[ETL]

The 1992 Rodney King riots...

"During the days immediately preceding the violence, RCP [The Revolutionary Communist Party] -- which maintained close ties to the L.A. gangs known as the Crips and the Bloods -- had circulated throughout South Central Los Angeles a leaflet featuring a statement by RCP National Spokesman Carl Dix, titled 'It's Right To Rebel' -- a quote popularized by Mao Zedong.

Encouraged by Dix, RCP activists helped lead the riots that would leave 58 people dead, more than 2,300 people injured, some 5,300 buildings burned, and $1 billion in property damaged or destroyed. On the ten-year anniversary of the rioting, RCP member Joseph Veale fondly recalled the violence as 'the most beautiful, the most heroic civil action in the history of the United States.'"

http://www.discoverthenetworks.org/groupProfile.asp?grpid=6197

_______________________________________

"NEVER FORGET that Maxine Waters embraced Damien Williams, the infamous thug who hurled a chunk of concrete at truck driver Reginald Denny and performed a victory dance over this innocent man’s battered body. Maxine Waters even visited Damien Williams’ mother to offer her support.

Williams was sent to prison on a single felony charge of mayhem, but when his accomplices got off, Waters joined in the celebration. Damien Williams was released a few years later and went on to [commit] murder... Also, no surprise, he was a member of the Crips."

http://www.independentsentinel.com/never-forget-maxine-waters-embraced-thug-hurled-concrete-reginald-denny/

______________________________________

Maxine Waters on the Los Angeles riots of 1992 (Rodney King riots):

"In defense of the people that looted stores and damaged property, [Maxine] Waters said 'If you call it a riot it sounds like it was just a bunch of crazy people who went out and did bad things for no reason. I maintain it was somewhat understandable, if not acceptable. So I call it a rebellion.'[5]

She also said it was 'a spontaneous reaction to a lot of injustice' and 'The anger in my district is righteous. I'm just as angry as they are'. "

http://en.wikipedia.org/wiki/Maxine_Waters#Los_Angeles_riots_of_1992

[reg45]

This doofus wants to recreate the mortgage / financial crisis of 2008.

[ETL]

Maxine Waters warns Shell president in House committee hearing

Posted: May 23, 2008
2008 WorldNetDaily

A report by Fox News, captured in a clip posted on YouTube.com (Must see video! http://www.youtube.com/watch?v=PUaY3LhJ-IQ) , showed Waters challenging the president of Shell Oil, John Hofmeister, to guarantee the prices consumers pay will go down if the oil companies are allowed to drill wherever they want off of U.S. shores.

Hofmeister replied: "I can guarantee to the American people, because of the inaction of the United States Congress, ever-increasing prices unless the demand comes down."

The Shell exec said paying $5 at the pump "will look like a very low price in the years to come if we are prohibited from finding new reserves, new opportunities to increase supplies."

Waters responded, in part, "And guess what this liberal would be all about. This liberal will be about socializing … uh, um..."

The congresswoman paused to collect her thoughts [for about 5-6 seconds this went on, while her colleagues behind her laughed].

"...would be about, basically, taking over, and the government running all of your companies..."

The oil executives responded, according to Fox News, by saying they've seen this before, in Hugo Chavez's Venezuela.

Article: Congresswoman threatens to nationalize oil industry Maxine Waters warns Shell president in House committee hearing:
http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=65111

Maxine Waters warns Shell president in House committee hearing

Posted: May 23, 2008
2008 WorldNetDaily

A report by Fox News, captured in a clip posted on YouTube.com (Must see video! http://www.youtube.com/watch?v=PUaY3LhJ-IQ) , showed Waters challenging the president of Shell Oil, John Hofmeister, to guarantee the prices consumers pay will go down if the oil companies are allowed to drill wherever they want off of U.S. shores.

Hofmeister replied: "I can guarantee to the American people, because of the inaction of the United States Congress, ever-increasing prices unless the demand comes down."

The Shell exec said paying $5 at the pump "will look like a very low price in the years to come if we are prohibited from finding new reserves, new opportunities to increase supplies."

Waters responded, in part, "And guess what this liberal would be all about. This liberal will be about socializing … uh, um..."

The congresswoman paused to collect her thoughts [for about 5-6 seconds this went on, while her colleagues behind her laughed].

"...would be about, basically, taking over, and the government running all of your companies..."

The oil executives responded, according to Fox News, by saying they've seen this before, in Hugo Chavez's Venezuela.

Article: Congresswoman threatens to nationalize oil industry Maxine Waters warns Shell president in House committee hearing:
http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=65111

[LibertarianLiz]

Weren't these things referred to as NINJA loans when this scheme was tried before? Didn't it trigger a recession?

[Socon-Econ]

The Trump administration needs to counter this by threatening to sue banks for bad loan quotas implemented to please the left. This nonsense has to stop. The public will support a stop if it is adequately explained.

The Bush administration refused to fight the bad loan quotas and lost the election when the loans went bad. The Democrats successfully fobbed the blame off onto the banks, who had also refused to fight back.

[Intolerant in NJ]

Maxine Waters’ “Diversity Committee” May Pressure Banks Into Making Bad Loans...why not - this is what 'rats have been about since Jimmi' Carter's Community Reinvestment Act - it's what eventually brought about the housing crash of 2008 - but low IQ Maxine wouldn't care even if she were smart enough to understand.....

[Mrs. Don-o]

I was about to say...

Thank you for being quicker on the trigger!

[smvoice]

“maxine waters now chairs...”
I still cannot wrap my head around this whole sordid Nov. election. She shouldn’t be allowed to run the mail cart, nevermind FINANCES. Sometimes it still hits me hard. How screwed we really are

[antidemoncrat]

“At President Clinton’s direction, no fewer than 10 federal agencies issued a chilling ultimatum to banks and mortgage lenders to ease credit for lower-income minorities or face investigations for lending discrimination and suffer the related adverse publicity. They also were threatened with denial of access to the all-important secondary mortgage market and stiff fines, along with other penalties.”

[HotHunt]

".... Congresswoman Waters’ newest initiative might eventually lead to history repeating itself....."

We've been there, done that before. This is Jimmy Carter's Community Reinvestment Act (CRA) all over again. Remember? That's the law that forced banks to lend to those who would not otherwise qualify under traditional, tested underwriting standards. It ostensibly was to prevent the banks from the practice of redlining but the unintended consequences were much worse.

The bottom fell out of the market in 2008, just before Obama was elected when all of the loans made to marginal borrows started to not pay off like the secondary market investors were expecting. When borrower's don't pay, then the paper the investors turns worthless. Caused a collapse of the world economies. It led to the worst depression since the Great Depression. With Trump in office, we're finally recovering from that mess.

And now that financial whiz Maxine Waters wants to try it all over again. Same thing will happen as before as before. Loans to people who live in marginally neighborhoods and who don't pay their obligations back as promised. Massive amounts of bad loans would be another disaster waiting to explode.

This is not about race or ethnicity. It's about extending loans to people who have a history of not paying their obligations back as promised. It unfortunately includes the poor and downtrodden. That means blacks in Maxine speak.

I was mortgage banker at the time and sat on the board of the Arizona Mortgage Bankers Association when the members started getting letters from the Clinton administration telling us to start lending to people who didn't normally qualify or else. Some bank presidents were threatened with jail time by his AG, Janet Waco, if they didn't start complying. We all knew what eventually was going to happen. And it eventually did.

This is what happens when Nancy Pelosi and the democRATS appoint somebody as financially ignorant as Waters to the chair finance committee.

[bankwalker]

At the same time I think a certain “community organizer” was “organizing” protests in the lobbies of some very big banks.

[SMARTY]

Ya think?

[HotHunt]

Roger that. Me too.

When you tell the lenders to started lending to people who don't otherwise qualify, you get no doc loans where the borrowers basically tell the lender what they make and the bank never verifies, income, employment, funds in the bank, credit history, etc. Anybody could quality. So bankers make the loans because the government is forcing them to.

Hay day for loan originators who make their money on the front-end but disaster for mortgage investors on the back-end holding worthless paper.

When the economy turned and borrowers bailed on their payments right and left, leaving world investors holding the bag, the world economy collapsed.

And now Maxine wants to do it all over again. Big mistake putting her in as the chair of the finance committee. She knows nothing about finances.

[Skepolitic]

Are you sure that the lunatic left doesn’t want to crash the financial system?

The 2008 crash got Obama elected and made socialism more popular than ever. Another massive crash might just be the ticket in their view.

[Skepolitic]

They’ll insist that credit scores be race-normed like SAT scores and civil service exam scores.

Equality of outcome >> equality of opportunity.

[txrefugee]

Any banker that caves to that imbecile will not get to keep my money for me.

[upchuck]

1200 x 675?

http://www.freerepublic.com/focus/f-chat/3725893/posts?page=30#30

[griswold3]

Agreed. I do believe it was a manufactured crisis. A perfect storm