Darryl Fears and Carol D. Leonnig, Washington Post, October 3, 2008
The head of the National Urban League is calling on Treasury Secretary Henry M. Paulson Jr. to refute statements by conservative politicians and pundits that subprime mortgages provided to minorities led to the financial crisis and a $700 billion federal rescue of Wall Street.
In a strongly worded letter to Paulson this week, Marc H. Morial said Paulson has “an obligation to correct the misinformation that is spread concerning the root cause of the current financial crisis.”
On the House floor, on cable network television and in Internet blogs in recent days, conservative politicians and commentators have traced the problem to the Community Reinvestment Act, or CRA, enacted in 1977 to extend loans to minorities who were historically denied homeownership.
Rep. Michele Bachmann (R-Minn.) lashed out against the act, reading from an from Investor’s Business Daily article that said banks made loans “on the basis of race and little else.” Neil Cavuto, a business news anchor on Fox News, recently made a similar statement. In an exchange on television with Rep. Xavier Becerra (D-Calif.), Cavuto noted that the congressman pushed for more minority lending to “folks who heretofore couldn’t get mortgages” and asked, “Are you totally without culpability here? Are you totally blameless?”
Rep. Barney Frank said Monday that Republican criticism of Democrats over the nation’s housing crisis is a veiled attack on the poor that’s racially motivated.
The Massachusetts Democrat, chairman of the House Financial Services Committee, said the GOP is appealing to its base by blaming the country’s mortgage foreclosure problem on efforts to expand affordable housing through the Community Reinvestment Act.
“They get to take things out on poor people,” Frank said at a mortgage foreclosure symposium in Boston. “Let’s be honest: The fact that some of the poor people are black doesn’t hurt them either, from their standpoint. This is an effort, I believe, to appeal to a kind of anger in people.”