Banking on the poor

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In an effort to lessen the effects of the 2008 recession, the federal government infused $700 billion into the big banks, essentially buying up or insuring bad loans, and enabling those financial institutions to start lending to us little people, whose homes were either underwater or lost, thanks to sky-high balloon payments. It was a sweetheart deal for wealthy banking executives, first because of the federal bailout itself, and second, because no one policed their good faith agreement to lend money to those who needed it the most. If you were outraged by that blatant example of taxpayer-funded corporate welfare, get ready for 2020, and President Trump’s new spin on the Community Reinvestment Act. The CRA was enacted in 1977 to make sure that banks lent money for homes and businesses in impoverished communities. In return, the banks would receive big tax breaks. Fair enough, however, several weeks ago, two agencies under the Trump administration (the FDIC and the Office of the Comptroller of the Currency) announced proposed changes to CRA, which don’t pass the smell test. According to a report by Bloomberg’s Noah Buhayar and Jesse Hamilton, one of those changes allows banks to meet their CRA obligations to the poor if they simply finance improvements to athletic stadiums in a government-designated “Opportunity Zone.” Oregon Senator Ron Wyden isn’t buying the stadium scam, saying, “There are no safeguards to ensure taxpayers are not simply subsidizing handouts for billionaires, with no benefit to the low-income communities this program was […]

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