The 2008 mortgage meltdown and ensuing financial crisis were largely caused by militant leftists who used the fist of Big Government to force banks to make bad loans based on race for the sake of wealth redistribution. The collapse worked out great for the Democrats, sweeping Obama into power, giving him a ready excuse for the predictable failure of his socialist policies, and making millions more reliant on government handouts. Consequently, it should come as no surprise that the Regime is doubling down on this lunacy, as if deliberately conspiring to cause another crash:
In a complaint filed Wednesday and settled the same day, Justice claimed that California-based Luther Burbank Savings violated the 1968 Fair Housing Act and 1974 Equal Credit Opportunity Act by setting a policy that had a “disparate impact” on minorities. Between 2006 and mid-2011, 5.2% of Luther’s single-family residential mortgage loans went to African-Americans and Hispanics, compared to an average of 41.7% for other lenders in the area. The complaint doesn’t cite evidence of intentional discrimination because there wasn’t any. …
Over the period that Justice examined, Luther Burbank foreclosed on a mere 11 borrowers out of 629 loans outstanding — a loss ratio of 1.75%. In a normal world, Luther Burbank would get a medal from regulators for its risk management, having chosen borrowers even at the height of the housing mania who could meet their monthly payments.
But Assistant Attorney General for Civil Rights Thomas Perez has a different priority: He wants banks to meet lending quotas to minorities — regardless of whether those borrowers can afford the loans.
Obviously it isn’t the bank’s fault if politically privileged ethnic groups do not have the same work ethic as ethnic groups our liberal overlords despise. But “social justice” means never worrying about what a sane person would regard as fair.
How is a bank supposed to stay in business under these circumstances? It isn’t. Those that are deemed Too Big to Fail under Dodd-Frank have in effect been nationalized. The rest are obstacles to be eradicated on the path to socialism.
Luther Burbank admitted no guilt and said it settled to avoid costly litigation, which makes sense for a small, local lender that has to worry about its reputational risk. The bank has agreed to ratchet down its minimum loan to $20,000 and will now commit $2.2 million to a “special financing program” for “qualified borrowers,” payouts for local community groups, and “consumer education programs.” Justice has the final say on who gets that money.
In other words, they got mau-maued by the racist socialists who run the government. To think this was once America.
On a tip from Varla.