Gaming The System | Showdown in America


8/13/10

New Report Shows How Community Reinvestment Act Failed To Stop Predatory Practices by Wells Fargo, JPMorgan Chase, CITI and Bank of America

Major lenders have been subverting their legal responsibilities to meet the credit needs of their communities.

Our new report, Gaming The System, outlines how four of the big banks–Bank of America, Wells Fargo, Citibank, and JP Morgan Chase–have exploited loopholes in the Community Reinvestment Act (CRA) by funneling the bulk of their destructive and discriminatory lending ‘off the books’ to their affiliate lenders and outside of their graded assessment areas.

The toxic predatory lending that first flooded minority and Low to Moderate-Income, LMI, neighborhoods caused a tsunami that devastated not only the neighborhoods where the bulk of these loans were made, but also led to the near-collapse of our entire financial system, the multi-billion dollar tax-payer funded bail-out of our major financial institutions, loss of billions in retirement savings lost, foreclosures on millions of homes, and the worst and longest lasting unemployment crisis in generations.

What does CRA have to do with it?

The vast majority of the lending that caused this crisis occurred outside the law of CRA through unregulated non bank and bank-owned mortgage companies and outside the geographies where banks are graded for CRA. Had CRA covered all of the lending that was occurring, it is likely that the worst of the crisis could have been averted.

VIDEO: Liz Ryan Murray and Dr. Eugene Barnes of National People’s Action expound on the report on Democracy Now! (on right)

Download or scroll through the report below (note: you can view the report in full-screen mode by clicking on the icon in the upper right-hand side of the box below).

 

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