Obama, CRA, and the Mortgage Mess

Think that CRA, the Community Reinvestment Act, helped lower mortgage lending standards, which in turn led to the so-called- mortgage crisis, the credit crisis, and the dramatic fall in the housing market subsequent to all those foreclosures? Do you believe that threatening lenders with high cost legal action, such as class action lawsuits, in order to force them to abandon their credit standards and get them to extend loans to those “victims” of society whose credit stinks is at least partially responsible for today’s mortgage/credit mess?
Well, you’re right.
And you can blame a class action lawsuit entitled Buycks-Roberson v. Citibank Fed Savings Bank (94 C 4094 ( N.D. Ill. ), and a young Davis-Miner attorney named Barack Hussein Obama.
From the Case Summary:

Plaintiffs filed their class action lawsuit on July 6, 1994, alleging that Citibank had engaged in redlining practices in the Chicago metropolitan area in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691; the Fair Housing Act, 42 U.S.C. 3601-3619; the Thirteenth Amendment to the U.S. Constitution; and 42 U.S.C. 1981, 1982. Plaintiffs alleged that the Defendant-bank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories. Plaintiffs sought injunctive relief, actual damages, and punitive damages.
U.S. District Court Judge Ruben Castillo certified the Plaintiffs’ suit as a class action on June 30, 1995. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 322 (N.D. Ill. 1995). Also on June 30, Judge Castillo granted Plaintiffs’ motion to compel discovery of a sample of Defendant-bank’s loan application files. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 338 (N.D. Ill. 1995).
The parties voluntarily dismissed the case on May 12, 1998, pursuant to a settlement agreement.

Worth noting is the fact that Citibank FSB was forced by the settlement agreement to do a substantially increased volume of sub-prime mortgages since the credit of the majority of the plaintiff class was below conventional Fannie/Freddie underwriting standards. Note too, that there is, predictably, no mention of credit scores in the case file.
This is what young Mr. Obama trumpets as his experience as a so-called “civil rights attorney” and we are all suffering the consequences of his foray into judicial extortion.
H/T: Patrick