The Obama Justice Department has announced a record settlement with Bank of America which will provide $335 Million in compensation to thousands of borrowers of African and Hispanic ethnicity. According to accusations by the DOJ, these applicants suffered discriminatory loan practices by Countrywide Financial from 2004-2008. Bank of America purchased Countrywide in 2008.
If the lender did engage in the alleged behavior, it should be fined. But the irony of the situation is so thick as to demand commentary. Why so? Because the current crisis that is destroying our economic vitality was in great part caused by federal regulations requiring mortgages for persons unable to pay for them. Is this a justified settlement, or another example of excessive zeal on the part of government? We may never know for sure.
What we do know, however, is that the irresponsible behavior of the federal “watchdogs” has cost millions of Americans of every ethic background piles of money and years of security that can never be adequately accounted for. While accepting their generous salaries and benefits, and while allowing the executives of Fannie Mae and Freddie Mac to receive millions in salary and bonuses, members of Congress like Barney Frank (D-MA) ignored the warning bells that could have brought about governmental reform before crashing our economy.
All the while, members of Congress were getting sweetheart loan deals from Countrywide Financial.
Ever vigilant in the cause of equal justice (except when certain paramilitary radicals are standing in front of polling places with batons), Attorney General Eric Holder stated that financial institutions “should make judgments based on applicants’ creditworthiness, not on the color of their skin.” Agreed, but that standard cuts both ways–in finance and in regard to the freedom to vote unimcumbered by threat.