[ Pobierz całość w formacie PDF ]
.Another set of warning signs about the ex-panding scope of predatory lending came from the experiences of ACORNHousing Corporation clients.ACORN Housing Corporation (AHC) was established in 1986 as an out-growth of ACORN s work pressuring banks to expand their lending in low-and moderate-income and minority communities.Rather than simplypushing lenders to make broad commitments to increase lending, ACORNworked to create a mechanism to actually make banks deliver loans on fairterms to residents of ACORN neighborhoods.Through this program, in-cluding specially modified underwriting and rate or fee discounts negoti-ated with lenders, since 1986 AHC has provided loan counseling to more Community Organizing and Advocacy 135than 130,000 borrowers, and helped more than 50,000 families becomefirst-time home owners.With increasing frequency in the mid- to late 1990s, however, AHCclients who had begun as home owners with good, affordable loans werereturning to AHC offices in serious trouble because of high-cost refinanceloans.These borrowers had been pushed to refinance out of low-cost loans,into high-cost loans more often than not having been seriously misledabout the costs and consequences of the refinance loans they were sold.Recognizing the growing and harmful impact of predatory lending in al-ready struggling neighborhoods, ACORN developed a comprehensive cam-paign to curb predatory lending which included a number of key elements.First, we began a broad campaign to educate home owners and prospec-tive home owners about the dangers and warning signs of abusive loans.To reach these families, we utilized ACORN s established presence in themost affected communities, promoted the message through media gener-ated by other aspects of our campaigns, and worked with AHC to provideinformation about predatory loans and how to avoid them as a key andrepeated piece of the mortgage counseling it provides.AHC also went onto add postpurchase counseling to its programs in order to help borrow-ers find good refinance loans.Second, ACORN, working closely both locally and nationally with theAARP and the Coalition for Responsible Lending, as well as many otherorganizations in each state, has fought for significant new legislationagainst predatory lending practices at the state and local levels.Along withthese other groups, our members lobbied their legislators, testified at hear-ings, spoke to the press, and mobilized in state capitals and in their homedistricts as major participants in successful legislative efforts in the statesof New Mexico, New York, California, and New Jersey, and cities of NewYork, Oakland, and Los Angeles, among others.Third, ACORN has worked to communicate our members and theircommunities experiences with predatory lending to national policy mak-ers in Washington, D.C., and elsewhere.Our members have tried to pushlegislators and regulators to take action by repeatedly confronting themwith the problem and its victims, and by showing them that their con-stituents care about and will hold them accountable for the specific pol-icy changes needed to address the problem.Such meetings with officials atHUD and the Treasury, for example, ultimately helped push these agenciesto hold field hearings about predatory lending in 2000, and to publish areport on their findings2 (which in turn was useful both as a tool in statelegislative fights and in moving other federal regulatory change).Once thehearings were scheduled, hundreds of ACORN members turned out to at-tend them and to testify.Their voices have added an important elementboth of actual experience and of connection to community residents on theground back home, as we have joined with other national groups in de- 136 Why the Poor Pay Moremanding regulatory changes such as pressuring the Federal Reserve Boardto crack down on financed credit insurance products.Combining research with grassroots organizing and direct action, in2001 we released the first national and city-by-city study of the proportionof purchase and refinance loans made by subprime lenders in lower-incomeand minority neighborhoods,3 and we have produced annual updates since.We have released these studies at local press conferences where ACORNmembers, often accompanied by local and state elected officials, speakabout their own loans and about the problems being caused in their com-munities.Each year, these events and the studies findings have been cov-ered by 70 or more major publications and television and radio stationsaround the country.Finally, ACORN spearheaded a series of national campaigns targetingindividual lenders that are major players in the subprime market.By fo-cusing on specific companies, we have been able to force these lenders tomake major changes in their business practices while also illustrating theproblems that demand legislative and regulatory solutions.HOUSEHOLD FINANCESince the late 1990s, Household Finance, along with Beneficial (an inde-pendent lender purchased by Household in 1998), has been either thelargest or the second largest subprime lender by loan volume every year.By 2000, the company was making $15.3 billion in mortgage loans a year.As ACORN heard a growing volume of stories from our members aboutproblems with Household loans, and we realized how large a player thecompany was, a campaign to force changes at Household emerged as a keypart of our overall effort against predatory lending.When the campaignbegan, there had been virtually no public scrutiny of Household s lendingpractices, and the company was growing fast and doing well.The level ofoutrage provoked in our members by the practices they experienced, or thatthey heard about from neighbors and friends, and the significance of thecompany in the market as a whole made it an attractive campaign target.It was also clear, however, that it was a formidable one we would be de-manding nothing short of major revisions in a corporate giant s basic busi-ness practices.ACORN s grassroots campaign against Household used a wide varietyof tactics and strategies:" Through outreach and organizing, the campaign identified community residentswho had problems with Household loans, and involved them in the campaign." In order to build and communicate a picture of the company s business practices,we carefully documented hundreds of borrowers loans, and their experiences ingetting those loans. Community Organizing and Advocacy 137" In more than 40 cities across the country, local ACORN chapters coordinateddirect actions and other protests targeting Household lending offices, processingcenters, and even the homes of senior executives." To draw attention to Household s practices locally and nationally, we organizedan extensive media campaign which worked to get articles exposing the prob-lems with Household loans into newspapers and on the radio and televisionaround the country." We promoted a shareholder resolution on predatory practices, and pressed gov-ernment and private shareholders to push the company to change." Working with the law firm of Miner, Barnhill & Galland, P.C [ Pobierz całość w formacie PDF ]
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.Another set of warning signs about the ex-panding scope of predatory lending came from the experiences of ACORNHousing Corporation clients.ACORN Housing Corporation (AHC) was established in 1986 as an out-growth of ACORN s work pressuring banks to expand their lending in low-and moderate-income and minority communities.Rather than simplypushing lenders to make broad commitments to increase lending, ACORNworked to create a mechanism to actually make banks deliver loans on fairterms to residents of ACORN neighborhoods.Through this program, in-cluding specially modified underwriting and rate or fee discounts negoti-ated with lenders, since 1986 AHC has provided loan counseling to more Community Organizing and Advocacy 135than 130,000 borrowers, and helped more than 50,000 families becomefirst-time home owners.With increasing frequency in the mid- to late 1990s, however, AHCclients who had begun as home owners with good, affordable loans werereturning to AHC offices in serious trouble because of high-cost refinanceloans.These borrowers had been pushed to refinance out of low-cost loans,into high-cost loans more often than not having been seriously misledabout the costs and consequences of the refinance loans they were sold.Recognizing the growing and harmful impact of predatory lending in al-ready struggling neighborhoods, ACORN developed a comprehensive cam-paign to curb predatory lending which included a number of key elements.First, we began a broad campaign to educate home owners and prospec-tive home owners about the dangers and warning signs of abusive loans.To reach these families, we utilized ACORN s established presence in themost affected communities, promoted the message through media gener-ated by other aspects of our campaigns, and worked with AHC to provideinformation about predatory loans and how to avoid them as a key andrepeated piece of the mortgage counseling it provides.AHC also went onto add postpurchase counseling to its programs in order to help borrow-ers find good refinance loans.Second, ACORN, working closely both locally and nationally with theAARP and the Coalition for Responsible Lending, as well as many otherorganizations in each state, has fought for significant new legislationagainst predatory lending practices at the state and local levels.Along withthese other groups, our members lobbied their legislators, testified at hear-ings, spoke to the press, and mobilized in state capitals and in their homedistricts as major participants in successful legislative efforts in the statesof New Mexico, New York, California, and New Jersey, and cities of NewYork, Oakland, and Los Angeles, among others.Third, ACORN has worked to communicate our members and theircommunities experiences with predatory lending to national policy mak-ers in Washington, D.C., and elsewhere.Our members have tried to pushlegislators and regulators to take action by repeatedly confronting themwith the problem and its victims, and by showing them that their con-stituents care about and will hold them accountable for the specific pol-icy changes needed to address the problem.Such meetings with officials atHUD and the Treasury, for example, ultimately helped push these agenciesto hold field hearings about predatory lending in 2000, and to publish areport on their findings2 (which in turn was useful both as a tool in statelegislative fights and in moving other federal regulatory change).Once thehearings were scheduled, hundreds of ACORN members turned out to at-tend them and to testify.Their voices have added an important elementboth of actual experience and of connection to community residents on theground back home, as we have joined with other national groups in de- 136 Why the Poor Pay Moremanding regulatory changes such as pressuring the Federal Reserve Boardto crack down on financed credit insurance products.Combining research with grassroots organizing and direct action, in2001 we released the first national and city-by-city study of the proportionof purchase and refinance loans made by subprime lenders in lower-incomeand minority neighborhoods,3 and we have produced annual updates since.We have released these studies at local press conferences where ACORNmembers, often accompanied by local and state elected officials, speakabout their own loans and about the problems being caused in their com-munities.Each year, these events and the studies findings have been cov-ered by 70 or more major publications and television and radio stationsaround the country.Finally, ACORN spearheaded a series of national campaigns targetingindividual lenders that are major players in the subprime market.By fo-cusing on specific companies, we have been able to force these lenders tomake major changes in their business practices while also illustrating theproblems that demand legislative and regulatory solutions.HOUSEHOLD FINANCESince the late 1990s, Household Finance, along with Beneficial (an inde-pendent lender purchased by Household in 1998), has been either thelargest or the second largest subprime lender by loan volume every year.By 2000, the company was making $15.3 billion in mortgage loans a year.As ACORN heard a growing volume of stories from our members aboutproblems with Household loans, and we realized how large a player thecompany was, a campaign to force changes at Household emerged as a keypart of our overall effort against predatory lending.When the campaignbegan, there had been virtually no public scrutiny of Household s lendingpractices, and the company was growing fast and doing well.The level ofoutrage provoked in our members by the practices they experienced, or thatthey heard about from neighbors and friends, and the significance of thecompany in the market as a whole made it an attractive campaign target.It was also clear, however, that it was a formidable one we would be de-manding nothing short of major revisions in a corporate giant s basic busi-ness practices.ACORN s grassroots campaign against Household used a wide varietyof tactics and strategies:" Through outreach and organizing, the campaign identified community residentswho had problems with Household loans, and involved them in the campaign." In order to build and communicate a picture of the company s business practices,we carefully documented hundreds of borrowers loans, and their experiences ingetting those loans. Community Organizing and Advocacy 137" In more than 40 cities across the country, local ACORN chapters coordinateddirect actions and other protests targeting Household lending offices, processingcenters, and even the homes of senior executives." To draw attention to Household s practices locally and nationally, we organizedan extensive media campaign which worked to get articles exposing the prob-lems with Household loans into newspapers and on the radio and televisionaround the country." We promoted a shareholder resolution on predatory practices, and pressed gov-ernment and private shareholders to push the company to change." Working with the law firm of Miner, Barnhill & Galland, P.C [ Pobierz całość w formacie PDF ]