An article in today’s Politco highlights a very interesting trend in federal campaign contributions. It seems as though industries most responsible for the mortgage and housing crises have suddenly become very politically active, donating more funds to Senate and House candidates than ever seen in recent election cycles.
The Politico reports a tremendous increase in contributions through the first three months of 2008 compared with entire 2006 political cycle. Here’s a chart mapping this out:
Lobbyists have also gotten in on the action. The Politico shows the increased money spent between 2006 and 2007 by Federal lobbying groups. Another chart shows this swell:
All this is worth noting in light of week’s bipartisan housing compromise, touted by conservatives as the first Congressional step towards “solving” the foreclosure crisis, which has been heavily criticized as being pro business, pro industry, pro special interest, and anti American family. Largely due to the stripping of progressive provisions designed to protect homeowners, such as Senator Durbin’s (D-IL) bankruptcy measure, this legislation seems to cater towards the very groups that invested so much money electing their chosen members of Congress.
The Politico highlights one last interesting point: “Civil rights and consumer groups already are tapping black and Hispanic caucus members to highlight the disproportionate effect the foreclosure crisis is having on minority communities and to fight for better protections for those homeowners.”
Indeed, these industries got the money to donate to their members of Congress from preying on minority communities. As a study conducted by the Inner City Press/Fair Finance Watch found, “Banks such as JPMorgan Chase, Citigroup, Bank of America, and Countrywide issued subprime loans to minorities more than twice as often as whites. At some institutions, the number of subprime loans issued increased, even amid a growing credit liquidity crisis.” In the study, Inner City Press reported that in 2007:
— Citigroup extended higher-cost loans 2.33 times more frequently to African Americans than whites
— JPMorgan Chase extended higher-cost loans 2.44 times more frequently to African Americans than whites, and 1.6 times more frequently to Latinos
— Bank of America extended higher-cost loans 1.88 times more frequently to African Americans than whites
— Countrywide Financial, which Bank of America has applied to buy, extended higher cost loans 1.95 times more frequently to African Americans than whites
The study released by Inner City Press is timely, as this Friday marks the 40th anniversary of passage of the federal Fair Housing Act, a broad and loosely enforced civil rights law. “Lack of federal oversight of the work of mortgage lenders and brokers has led us to today’s foreclosure crisis,” said Shanna L. Smith, President and CEO of the National Fair Housing Alliance. “An important part of this negligence has been the government’s lack of commitment to enforce the fair housing laws,” she added. “HUD’s and Justice’s paltry performance gave the green light to discrimination by both prime and sub-prime lenders nationwide.”