Why Did Bank of America Pay ACORN?
On September 29, the article “Bank of America Pulls ACORN funding” appeared on the CNN political ticker. While the short piece thankfully does list some of ACORN's recent scandals, such as the Breitbart video investigation and the voter registration fraud, it didn’t answer the question that was surely on every reader’s mind: What exactly was Bank of America paying ACORN for?
Let’s not fault writer/editor Amy Sabha for not addressing the topic, as she was clearly very busy working on this video in which she goes up and down the UN escalator.
Instead we can just go to the Bank of America community website, which notes that the firm works with ACORN in more than 20 cities to provide “special mortgage products.” Or we can go to the ACORN Housing website, which describes a program that produced $246 million in mortgages from Bank of America with “flexible underwriting and discounted pricing.” Or this page, which describes a program with low down payments, no private mortgage insurance, no cash reserve necessary, and flexibility on income requirements, such as being able to include public assistance.
Yes, ACORN and Bank of America joined forces to become the ultimate subprime lender. So much for the organization’s lofty social justice rhetoric.
Yet there’s more. In February, right after the inauguration, Bank of America reported that it had made $2 million in national grants to ACORN Housing Corporation between October 2007 and June 2009 (planned). Only a handful of conservative outlets (Michelle Malkin, for example) picked up the story.
It’s easy to pick on Bank of America. The firm has received more than $45 billion in taxpayer money during the bailouts, was fined for securities fraud -- specifically withholding information -- in the purchase of Merrill, paid out millions in bonuses, and even introduced bank accounts for illegal aliens a few years ago, a sound practice that surely had nothing to do with their financial troubles today. They are an embarrassment to an industry that has little shame left.
Still, they’re not the only ones that gave millions to ACORN, and we should expect further announcements in the coming days. JP Morgan Chase is already under fire, identified more than a month ago as a multi-million dollar ACORN donor or partner by the National Legal and Policy Center. (Story picked up by CNN? Of course not -- try Glenn Beck and Judge Andrew Napolitano.)
In this sordid tale, the unsympathetic banks are more victims than villains. The Community Reinvestment Act gives groups like ACORN considerable power over the institutions. It can accuse them of economic discrimination against minorities, forcing them to defend their business practices and reputations against de facto charges of racism. The penalties can be hefty fines and even blocked mergers.
ACORN perfected this “pay for protection” business model in the 1990s. And it is a business. While some of the ACORN organizations are non-profit, others are not, which means that by working together they can get the best of all worlds: political actions, union-style organization, tax-exempt status, privacy, and profit.