Reading time: 4 – 6 minutes
The immediate cause of the worldwide financial Crash of 2008 was the extensive granting of sub-prime mortgages.
The master architect of this financial bad behavior was Representative Barney Frank, Democrat of Massachusetts, Chairman of the House Financial Services Committee.
The tentacles of sub-prime lending are far reaching and grow from a bed of corrupt politics.
On June 25, 2010, President Barack Obama posted to his Twitter Account,
“Last night’s House-Senate agreement on Wall Street reform represents the toughest financial reform since the Great Depression.”
This was perhaps the most misleading statement that Obama has made in his political career.
Non-reform, reform
One would think that in the context of the Crash of 2008, the very minimum one would expect in a financial reform measure would be the elimination of sub-prime mortgages and other forms of sub-prime lending.
However, the Dodd-Frank “Wall Street Reform and Consumer Protection Act”, published as H.R.4173 (Dodd-Frank Conference Report), as of June 27, 2010, not only ignored mention of Fannie Mae and Freddie Mac, the two government agencies that were the principal drivers of sub-prime mortgages, but introduced in Title XII, “IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS”, a new, fraud-prone solution to a non-existent problem, the granting of $2,500 loans to middle and low income borrowers.
The purpose of Title XII is given as,
Corrupt politics offer fertile ground for spurious financial measures to sprout.
“To encourage initiatives for financial products and services that are appropriate and accessible for millions of Americans who are not fully incorporated into the financial mainstream.”
Since the ‘financial products’ which this Title appears to address are primarily loans not exceeding $2,500, and since in recent years credit cards have been profusely issued to unemployed college students and homeless people, and since there has been no build up in the financial press, left or right, for the need for any special help for ‘Americans who are not fully incorporated into the financial mainstream’ (whatever that is), one can only wonder why Barney Frank and Chris Dodd would have dedicated a whole Title of this bill to this subject.
What Title XII Does
Stripped of the procedural details, the principal points of Title XII are as follows:
Clever politicians, with free access to taxpayer funds, can weave extraordinary networks of corruption.
- Authorizes a multi-year program of grants (i.e., disbursements of taxpayer money that doesn’t have to be paid back);
- Allows certain ‘eligible entities’ to receive such grants. (Organizations of the type of ACORN would seem to be eligible, if they know how to apply and have the right connections.);
- Uses these grants to offer loans of up to $2,500, paid in installments;
- Uses these grants to offer ‘education’ to teach people how to access these ‘loans’;
- Uses these grants to pay for defaults on these loans.
Although the regulations of this novel sub-prime program are not yet known, given the spurious backgrounds of the progenitors of this program, Barney Frank and Chris Dodd, it is not hard to imagine how this title could be used by an ACORN-like organization to grant ‘loans’ to people it wants to enlist as voters for the Democratic Party, or any other cause.
In combination with other political funds, this program could be an extremely powerful tool for voter fraud.
In fact, it is difficult to imagine why else it would be inserted into the Dodd-Frank Act.
We will have to wait and see whether this Title survives and passes into law, who votes for it, and how it is used in practice.
But, as has been said, the price of liberty is eternal vigilance.
The text of this draft-law can be found here: Dodd-Frank Act Draft.
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For an article on Dodd-Frank from a Business Perspective, see: Markets & Policy..
[...] never held accountable or brought to task, but given a pass to reassert the same program under the Dodd-Frank “Wall Street Reform and Consumer Protection Act”, published as H.R.4173. Meanwhile, they overtly scheme to expand the September 2008 government unconditional guarantee [...]