Jun 1 2010

Predatory Lending? No Such Thing!

Photo Credit: Occupyourhomes.org

Photo Credit: Occupyourhomes.org

Remember predatory lending? The deceptive and discriminatory lending practices that were a driving force behind the housing bubble and disastrous collapse? Well, CNBC would like you to forget about it.

Critics pointed (CJR.org, 3/4/10) to a March 2 segment in which all assembled excoriated a guest for referring to the very idea. In a discussion which began with host Larry Kudlow suggesting that “this consumer protection thing” was “kind of a distraction,” financial consultant Janet Tavakoli mentioned that people had been “preyed upon,” which was greeted with general disbelief and dismissiveness.

Anchor Melissa Francis scoffed: “The phrase ‘predatory lending’ always kills me because how do you trick someone into—how do you force someone to borrow money? Don’t borrow it if you can’t afford it!”

Kudlow offered: “Oh, man! We’re all victims. Wait a second? We’re all preyed upon. Did they put a gun to the head of these people?”

And CNBC’s Rick Santelli argued that even if people “are stupid and they sign things that they don’t understand,” we shouldn’t change the system simply “because of the shortcomings of those that are financially illiterate.” Perhaps they should “take a class” before taking out adjustable rate mortgages, but, he cried with evident dismay: “Why should it deprive me? I understand how they work!”

On Fox News as well, hosts like Sean Hannity have reduced documented evidence of unfair practices targeting people of color and the poor to the whining of people who made off with loans they didn’t “deserve,” even reinvigorating the prominently discredited idea of blaming the Community Reinvestment Act (New York Times, 3/16/10; Extra!, 1/09).

On April 27, Hannity brought on Stuart Varney (of Fox Business News) to talk about “politicians trying to shoehorn people into houses which they could not afford, into loans which they could never pay back.” To which Hannity rejoined: “And government forced banks and financial lending institutions to do this. Why? Because under liberalism and redistribution, every American had the right to a home, whether they can afford it or not.”

Corporate pundits aren’t comfortable blaming anyone but the poor for poverty; they could hardly be expected to sustain acknowledgment that the biggest financial story of the decade was precipitated by the sort of systemic unfairness they pretend doesn’t exist.