Hundreds of thousands of families across the country are facing foreclosure. Many have already been put out of their homes. How does this happen in America? How is subprime lending (thanks to ACORN, the Community Reinvestment Act and Self-Help, Inc.) allowed to go on for so long before a president (Barack Obama) takes action? The president’s subprime recovery program is a step in the right direction.

But ACORN wants to play the villain in hero’s clothing. According to Rasmussen Reports, they are “encouraging people in foreclosure to resist the law and refuse to leave their homes.” Twenty-one percent (21%) of Americans support the idea. That’s better than one in every five of us, people. That’ll make up for that mess you made earlier, ACORN! I’m even going to take you out for Chicken McNuggets and Slushees later!

Luckily, 54 of Americans are smart

That percentage of people polled via phone oppose ACORN’s “passive resistance” tactic. So at least half of us understand what kind of damage a little ACORN can do. An even higher percentage of homeowners (60 percent) take the nay train.

Along political lines,  76 percent of Republicans oppose ACORN’s smoke screen. Democrats are divided, with 31 percent in favor and 35 percent opposed.

Halting foreclosures? People can get behind THAT

Fifty-six percent of Americans polled by Rasmussen Reports are favorable to the government forcing banks to stop all mortgage foreclosures for the next six months. President Obama’s $275-billion housing program is designed to help those most in danger. It will include that tact of subsidizing mortgage payments, however. A majority (45 percent; not counting undecided) claim this rewards those who bit off more home than they could chew in the first place. Similarly, 53 percent are against having the government help pay down the principal for troubled borrowers.

According to news reports, ACORN, officially known as the Association of Community Organizations for Reform Now, has plans to expand its so-called “Home Savers” campaign to more than 20 cities, including New York, Baltimore, Boston, Denver, Detroit, Pittsburgh, Cleveland and Dallas.

A bad nut in the bunch

ACORN, according to Rasmussen, “describes itself as “the nation’s largest grassroots community organization of low- and moderate-income people.” The majority of upper-income people polled oppose ACORN’s programs. Fifty-eight percent of Caucasians polled oppose ACORN’s “Home Savers” idea, while 41 percent of African-Americans are against the program. In both cases, there are significant “undecided” groups. Thankfully, no self-respecting, free-thinking citizens were harmed during polls.

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Jeremy Bentham

If you missed the beginning, CLICK HERE.

Yet as Peterson and Graves see it, there is some divergence. Some Old Testament passages appear to state that Hebrews were permitted to make interest-bearing payday loans to non-Jews, but not to fellow Jews. Later, the understanding of Christ’s ministry led Christians to believe that all interest-bearing loans were to be banned. This held until the Renaissance and Protestant Reformation, which is apparently when good business sense began to develop. Religious leaders questioned whether banning all interest was a good idea. John Calvin, Martin Luther and others suggested that only excessive interest was a problem. Pope Paul II even approved pawnshops in 1461.

What they do about payday loans

By the 1980s and early 1990s, a trend had developed in the American banking establishment where loaning to low and moderate income consumers was severely restricted. As a consequence, Congress adopted the Community Reinvestment Act at http://www.ffiec.gov/cra/, which required them to increase their efforts in these underserved and unserved communities. The success of the Act has been somewhat unsuccessful. As there was a definite demand for microcredit like payday loans, businesses began to open their doors to popular acclaim.

According to Peterson and Graves, Christian leadership began at this time to ally itself with a variety of business interests, perhaps remembering what their Renaissance and Reformation fathers had discovered about the need for operating capital. The result is splashed across the pages of the authors’ study – payday loan stores in the “Bible Belt” are found at a much greater density than anywhere else in the country.

Not surprisingly, as this happened, American legal response to faxless payday loans became more favorable. Why? First, the Supreme Court gave banks the authority to export high interest rate limits from across the country as it favored said banks. Second, inflation caused interest rates to rise. Rather than create temporary exceptions to antiquated usury rules, some state legislatures repealed payday loan rate limits altogether. Most of these states were located in the same “Bible Belt.”

A “Defense of Usury”

Customer satisfaction levels, loan prevalence and the flexibility of payday loans have made them a popular product for consumers, despite the lip service religious groups and supposed non-denominational activist organizations pay against them. Aside from the facts of Peterson and Graves’ study, there exists a classic treatise by English philosopher and financial reformer Jeremy Bentham. Bentham argues in favor of usury as a part of free trade and financial freedom, where the market dictates the price. The authors point out that Bentham’s ideas about usury have been hotly debated ever since the document appeared in 1787. Policymakers, judges, businessmen and academics are more suspicious of tight regulation of interest on products like the payday loan than they have ever been, in large part thanks to the forward thinking of Bentham. While the debate may never disappear completely, perhaps the actions of the Christian Right when it comes to supporting payday loan companies in their communities is the clearest indication of where they stand. Like anyone else in need of a small amount of cash in an emergency, they use  payday loans, too.

Of Usury, from Brant's Stultifera Navis

The proverbial “Christian Right” has traditionally been among the most vocal opponents of the product, which they consider to be usurious in the most pejorative modern definition (for the original definition, look here… usury may not be what you think it is). However, Peterson and Graves find that no fax payday loan companies tend to concentrate in high densities in conservative Christian states, particularly in relation to the number of traditional banks. In fact, whether or not there was a conservative Christian presence was shown to have a much greater impact upon the density of payday loan businesses than race or poverty levels (two of the primary weapons well-funded hatchet groups like the Center for Responsible Lending try to use against the industry).

What they say about usury

In one form or another, payday loans have been around for some time. Historical records speak of them in ancient Mesopotamia. Contracts and receipts were recorded on clay tablets. Lenders used the lunar cycle as a tool in establishing short-term loan due dates. The more abusive lenders who refused to deal in a civil manner with delinquent borrowers were essentially what prompted societies to consider loan pricing. The Babylonian and Roman Empires each had highly structured rate limits on various types of lending.

In the Bible, there are numerous Scriptures cited by the Christian Right as being against lending. A few of them are as follows (King James translation):

Exodus 22:25 - “If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shall thou lay upon him usury.”

Ezekiel 22:16-16 – “In thee have they taken gifts to shed blood; thou hast taken usury and increase, and thou has greedily gained of they neighbors by extortion, and hast forgotten me, saith the lord GOD. Behold therefore I have smitten mine hand at thy dishonest gain which thou hast made, and at they blood which hath been in the midst of thee. Can thine heart endure, or can thine hands be strong in the days that I shall deal with thee? I the LORD have spoken it, and will do it. And I will scatter thee among the heathen, and disperse thee in the countries, and will consume thy filthiness out of thee. And thou shalt take thin inheritance in theyself in the sight of the heathen, and thou shalt know that I am the LORD.”

Ezekiel 18:8-17 – “He that hath not given forth on usury, neither hath taken increase, that hath withdrawn his hand from  iniquity, hath executed true judgment between man and man, hath walked in my statutes, and hath kept my judgments, to  heal truly; he is just, he shall surely live, saith the Lord GOD.”

CLICK HERE to continue reading and see how the Christian Right deals with the payday loan in practice.

By Robert Kropp. Attempts by some conservatives to link the Community Reinvestment Act to predatory mortgage lending are shown to be misleading and often false.

Your Cash Advance News Source Quoted With Edits From: Studies Rebuff Charges of CRA Complicity in Financial Crisis (SocialFunds.com)

All Fingers Point towards the Community Reinvestment Act

Always Pointing Fingers, Even At Cash Advance Companies

The current financial crisis has Americans scrambling for answers, like how to fix it and who to blame. Apparently, it’s easier to point fingers than it is to find a solution. The Community Reinvestment Act (CRA) has been a huge target for many conservatives; the CRA has been accused of allowing predatory lenders to prey on low- and moderate-income, and often minority, neighborhoods. And supposedly, this predatory lending is what has pushed Americans deeper and deeper into debt.

Au Contraire

Despite the accusations, the CRA has the numbers to prove its critics wrong. The Federal Reserve performed a study that showed CRA banks were much more stringent in who they lent to and did not make as many higher-priced loans that have sent borrowers into foreclosure. Another study illustrated that banks under CRA regulation were less likely to originate sub prime mortgage loans to low-income borrowers.

A Faster Solution

The economy is hurting and so are Americans. Instead of placing blame, whether its deserved or not, we should be looking for a solution to the financial crisis. Curbing the efforts of predatory lenders, eliminating the cash advance industry, is not the solution Americans need. Americans need financial freedom in a time of financial turmoil.