WaMu’s $375 billion in Community Reinvestment Act loans was for pikers! A reader writes:

Here is a direct quote from a full-page ad placed by Bank of America in today’s (2/4/09) WSJ under the heading “Bank of America’s Promise to America:”

“We began a 10-year, $1.5 trillion investment in low-to-moderate income and minority communities — the largest investment of its kind in America.”

This from a company that would be bankrupt without the government bailout. Smacks of a CRA quid pro quo to me. I wonder who picks up the “promise” on this one.

One-and-a-half-trillion here, one-and-a-half-trillion there, pretty soon … All I can say is that If Everett Dirksen were alive today, he’d be spinning in his grave.

… Actually, I can say more.

Note that this is a full page ad not in Mother Jones or the New York Times, but in the Wall Street Journal.

You might think that now that Bank of America wants to get even more bailout money from the taxpayers, they’d ixnay mentioning to Wall Street Journal subscribers their earlier promise to lend $1.5 trillion imprudently, and that now they’d instead be talking about how the taxpayers are likely to get their money back in the long run.

But that’s not how the contemporary worldview works. Everybody is a Kool-Aid drinker, including WSJ subscribers. No, trillion in Community Reinvestment Act pledges shows you are a good bank, not one of those evil people who didn’t pour hundreds of billions down the CRA rathole. So, your moral superiority makes you worthy of getting even more money out of the taxpayers.

The $1.5 trillion dollar pledge was bragged about April 28, 2008 by B of A executive Liam McGee at a CRA hearing in Los Angeles evaluating B of A’s purchase of notorious subprime crater Countrywide (talk about a convergence of the walking undead!). As you might recall, everybody in the world became aware that the housing bubble had popped in the summer of 2007, but nine months later B of A was pledging to pour $1.5 trillion down the CRA rathole. And 9 months later, in 2009, they’re paying a lot of money to boast about their $1.5 trillion pledge to WSJ readers.

Now, the government can’t force bankers to risk $1.5 trillion. All that the government and the “community organizers” can do is select and nurture a now generation of bankers who think pledging $1.5 trillion to meet CRA goals is a great idea because that’s what all the bigshot bankers who got permission to buy up other banks have done for the last 15 years. If you want to be a winner, you play ball with ACORN and company.

Sorry about quoting at length, but if I edited out anything, you’d think I was altering the meaning by removing context. No, it’s really this egregious:

$1.5 Trillion Community Development Goal
Our continuing commitment to community development will not waver. As you know, in 2004, we raised the bar when we announced our ten-year, $750 billion community development goal. Today, we are raising that bar.

I am proud to announce Bank of America’s new, and unprecedented, 10-year goal of $1.5 trillion for community development lending and investments. This is the largest community development goal ever by any company in America. In coming years, this goal is certain to enhance quality of life for millions of Americans in need, by:

• helping finance construction of affordable housing throughout the nation,

• providing loans and other needed capital to small businesses,

• supplying consumer loans, including housing finance, for low- and moderate-income and minority borrowers, and

• financing economic development for communities in need.

(more…)

Gregg Keizer writes at Computerworld:

Makwana, who worked under contract at the Federal National Mortgage Association, better known as Fannie Mae, was terminated Oct. 24, 2008, after he was accused of creating a settings-changing script without his supervisor’s permission. Within 90 minutes of being fired, Makwana allegedly added another malicious script to a Fannie Mae server. The second script, hidden within a legitimate script that ran each morning on Fannie Mae’s network, was designed to disable monitoring alerts and all log-ins, delete the root passwords to the 4,000 Fannie Mae servers, erase all data and backup data, power off all the servers and then disable the ability to remotely switch on the machines.

The malicious script, which was set to trigger on Saturday, Jan. 31, was found by another Fannie Mae engineer within days of Makwana’s firing.

The script would have “caused millions of dollars in damage and reduced if not shutdown [sic] operations at [Fannie Mae] for at least one week,” the government’s complaint read.[Ex-Fannie Mae engineer pleads innocent to server bomb charge | FBI confirms goof in naming contractor's employer By Gregg Keizer, February 2, 2009]

Makwana is an “Indian National” whose “employment record was a matter of some confusion”. As I have reported before, it is simple idiocy to place young men far from home in a country they may not identify with or understand very well in charge of large sums of money and critical systems. What I want to know is who are the management team at Fannie Mae that let this idiocy happen?

I think there is circumstantial evidence we have seen some similar events at other companies. The question is when will something big enough happen that can’t be covered up-and what types of organized activity are happening in this confusion?

There are well organized fraud gangs that have infiltrated every major bank, government regulatory and law enforcement agency, according to fraud agents I have worked with. Normally fraud artists try to keep a low profile. However, in the middle of a “stimulus” involving hundreds of billions of expenditures–and massive bailouts of financial institutions, I can believe they might change their standard operating procedure. If someone is going for one last big score, a major act of computer vandalism would be a great way to cover it up.

I don’t have an opinion in the Makwana case. It is entirely plausible to me that he’s a patsy set up to take the blame when something much bigger happens. What is scary to me is that some of the sources cited in the article also appear to be folks that may not have a lot of identification with the US or its people. I don’t think the management of Fannie Mae-and many other major American companies really understand their operations very well any more-and may have effectively lost control of their companies.

I have some real empathy for many H-1b workers. Many of these folks have been promised much more than will ever be delivered to them. Some may even need assistance to return home.

The thing is, the H-1b program was a bad idea from the start. Indentured servitude has no place in the United States. If we are going to admit immigrants, it should be as equals–not as illegal aliens or guest workers-and those immigrants should be selected on their ability to contribute to a future in which the average American is better off-not to prop up a regime of increased concentration of wealth.

The Community Reinvestment Act, which authorizes the four federal bank regulators to veto a bank’s plan to buy another bank if it’s not lending or giving enough money to the right kind of people, is one of those things that sounds too boring to worry about. But, at least 600 outfits of “community organizers” find it fascinating (and lucrative) enough to belong to the National Community Reinvestment Coalition.

Early in this decade, a leftist think tank called PolicyLink wrote up a How To guide to mau-mauing the bank’s CRA flak-catchers. I’ve excerpted a sizable chunk below to give you an understanding of how it influenced who got mortgages and other lending, and to show you the sheer scale and pervasiveness of the CRA once you start looking into it.

As I explained on Sunday, those banks willing to play ball with NCRC, ACORN, Greenlining, the California Reinvestment Coalition, etc., are allowed by the federal government to grow via acquisitions. In contrast, banks that aren’t willing to play ball with these racial activists aren’t allowed to buy other banks.

Keep in mind, the government and the Obama-style community organizers don’t hold a gun to the bank’s heads and force them to make stupid loans. If you want to stay small (and maybe get bought up by a ballplayer), you don’t have to make stupid loans. But if you want to get big through acquisitions, you have to make the kind of loans that the government and the community organizers want you to make.

Will these politically-preferred borrowers pay you back?

You’ve got to ask yourself one question: “Do I feel lucky?” Well, do ya, bank?

And banks like Washington Mutual (which pledged $375 billion over 10 years in CRA loans) and Bank of America (which pledged $750 billion in 2004, plus $1.5 billion in charitable donations over ten years, some of which went to community organizers) said, “Why, yes, I do feel lucky.” So, they got to make lots of acquisitions … and wound up losing lots of the taxpayers’ money. The more prudent banks weren’t allowed to get big through acquisitions.

Not surprisingly, the ballplayers tend to get bigger than the skeptics. Also, not surprisingly, minorities have higher mortgage default rates, and the brokest banks tend to be the biggest banks.

Finally, the CRA changed the worldview of bankers by rewarding the imprudent with approval for their empire-building while blocking the imprudent. After awhile, all sorts of people assume that giving mortgages to dubious credit risks must be a great idea because that’s what famous bankers with their pictures on magazine covers, like Kerry Killinger of WaMu, do.

Here are excerpts from PolicyLink’s how-to guide to exploiting the Community Reinvestment Act, written before the Housing Bubble:

The importance of CRA lies in the fact that regulators do two sets of bank examinations: one for financial safety and soundness, and the other for community reinvestment. Increasingly, this biannual bank CRA examination by federal regulators offers opportunities to comment on the bank’s performance to the regulators and open a dialogue with the bank about neighborhood access to capital and financial services or lack thereof.

CRA negotiations are most powerful during a bank acquisition or merger, when the regulators are carefully scrutinizing the bank’s activities. The regulators look at CRA, among other issues, in deciding whether to approve a bank application to purchase another financial institution. It is also possible, however, to negotiate CRA commitments when there is no acquisition pending. When well prepared with data, community organizations can use public pressure to convince banks that they can gain financially [and otherwise] with a commitment to a community partnership.

(more…)

Since Michael Steele, the Professional Black just hired on as Republican National Committee Hand/Chairman has not disclosed any income tax issues (has he been asked?) he has not attracted much MSM attention this week.

VDARE.com, however, has not forgotten him.

The extent of the disaster of Steele’s appointment (presuming Republicans actually want to win, of course) can be gauged by looking at the members of his “Transition Team”. Of the ten members, only one, RNCman Henry Barbour of Mississippi, comes from a state the Republicans actually carried in the last several election cycles. The young and very silent (try googling on him!) nephew of Mississippi Governor Haley Barbour, Henry brings with him the sweet aroma of nepotism, entitlement…or worse. His primary discernable achievement appears to have been named a significant “bundler” for John McCain.

Ask Henry Barbour to say something.

Incidentally, the RNC has done a wonderful job of hiding the identity of its National Committee Figureheads since the wars of ’06/7. Then they were compactly listed, as often as not with email addresses. Not now!

Could they be sending us a message?

Steele’s Transition Team leader is someone called Reince Priebus, Wisconsin GOP Chairman, who was apparently in at the beginning. Wisconsin has not voted Republican since 1984 – before Priebus could participate:

… Priebus said. “Our core fundamental principles remain strong and mirror those of the majority of Americans. We must improve our outreach efforts in order to grow as a Party.

There is the point of view that one decides what is good for the country and then tries to persuade others. Or perhaps politics is just a team sport?

The GOP’s problem is that this is a team of losers.