As the housing crisis rages and the 99 Percent Movement gathers strength, the GOP’s pizza candidate Herman Cain came out this morning with a strong defense of America’s most beleaguered demographic: bankers. Asked how he would help an American facing foreclosure on CNN’s American Morning today, Cain declared, “I would get the government off the backs of the banks.” “Many of the banks can’t do some of the things they want to do to help folks” because of “regulations or the threat of regulations coming out of Washington,” he said.
Asked whether he thinks government has any role in ensuring that banks deal fairly with customers, Cain said “no” because “then you distort the free market system.” Insisting that banks really do “want to help people” but can’t because of Wall Street reform and (bizarrely) “Obamacare” regulations, he said the best way to address the foreclosure crisis is to “remove the barriers that are keeping [banks] from doing business the way they would want to”:
CAIN: I know people don’t like this, but no. Because then you distort the free market system. Here’s how you encourage banks: Remove the barriers that are keeping them from doing business the way that they would want to. Most banks would want to renegotiate with people on their mortgages, but I’m telling you there are restrictions that are more government driven that are keeping them — I’ve had bankers tell me this. They didn’t give me a list of all the things that, you know, could be done. They want to help people, they really do. But it is the threat of government regulations, it is the threat of the Dodd-Frank bill and rolling it out. Some of it is the threat of the whole Obamacare thing.
First of all, the health care law has absolutely no effect on banks. It’s a health care law.
More importantly, Cain is championing the same group whose bad mortgage loans helped spur the financial implosion of 2008, has left over 1 million Americans with foreclosed homes, and may push an additional 5.9 million Americans to that outcome over the next few years. Banks and their lobbyists have openly “delayed, diluted, and obstructed attempts to address the problem.” Instead, banks unleashed “robo-signers,” officials who sign foreclosure forms without reading them, and managed to set a foreclosure record last year despite their self-imposed foreclosure moratoriums.
What’s more, by calling for an end to the Dodd-Frank regulations to protect foreclosure victims, Cain is jeopardizing key consumer protections for those looking to own a home. The Consumer Financial Protection Agency — which Republicans are hell-bent on obstructing — is designed to stop predatory lending by helping prevent mortgage brokers from putting borrowers into higher interest loans, regardless of their long-term ability to pay. The Dodd-Frank bill also stops banks from selling off an entire loan to avoid the risk of mortgage default, another problem that contributed to the financial meltdown. The law requires lenders to retain 5 percent of every loan — a policy banks are desperately trying to repeal.
But Cain insists that such safeguards hurt the banks by preventing them from “getting as creative as they could get.” Seeing as the banks’ “creativity” led to the housing crisis in the first place, perhaps Cain should take them out of the driver’s seat.