The Obama administration has started suing banks for having standards based on income levels and credit ratings because they’re supposedly "racist"

http://www.investors.com/NewsAndAnalysis/Article/577794/201107081851/DOJ-Begins-Bank-Witch-Hunt.aspx

In what could be a repeat of the easy-lending cycle that led to the housing crisis, the Justice Department has asked several banks to relax their mortgage underwriting standards and approve loans for minorities with poor credit as part of a new crackdown on alleged discrimination, according to court documents reviewed by IBD.

Prosecutions have already generated more than $20 million in loan set-asides and other subsidies from banks that have settled out of court rather than battle the federal government and risk being branded racist. An additional 60 banks are under investigation, a DOJ spokeswoman says.

No Job, No Problem

Settlements include setting aside prime-rate mortgages for low-income blacks and Hispanics with blemished credit and even counting "public assistance" as valid income in mortgage applications.

In several cases, the government has ordered bank defendants to post in all their branches and marketing materials a notice informing minority customers that they cannot be turned down for credit because they receive public aid, such as unemployment benefits, welfare payments or food stamps.

Among other remedies: favorable interest rates and down-payment assistance for minority borrowers with weak credit.

For example, the government has ordered Midwest BankCentre to set aside almost $1 million in "special financing" for residents living in predominantly black areas of St. Louis. The program includes originating conventional home loans at fixed prime rates for African-American borrowers "who would ordinarily not qualify for such rates for reasons including the lack of required credit quality, income or down payment."

The same federal order, signed last month, praises Midwest for adopting "less stringent underwriting criteria" while under investigation.

In the case against Citizens Bank of Detroit, settled in May, the U.S. decrees that "the bank may choose to apply more flexible underwriting standards in connection with the programs under this order."

Such efforts risk recreating the government-imposed lax underwriting that led to the housing boom and bust, critics fear.

"It's absolutely outrageous after what we've just gone through," said former Rep. Ernest Istook, a Heritage Foundation fellow. "How can someone both be financially stable enough to merit a mortgage at the same time they're on public assistance? By definition, you don't have the kind of employment that can support such a loan."

...

Effectively, the same moronic government interference that was tried in the 1990s and led to banks inventing moronic mortgages and derivatives to minimise their risk is being tried again.

Banging...my...head...against...a..brick....wall.

It's like the NAACP with super powers and a short term memory.

I mean, i get what they're doing. It's a halfassed way to close the wealth gap...

but it's a complete ass backwords and dangerous way to do it, as can be seen by... well, it having just backfire before.

This is like the same thing, but actually more harsh, because instead of just offering benefits it's forcing it.

LMAO. So he's repeating the exact same shit that got us into this mess to begin with. Remember when people used to talk about how smart this motherfucker was?

When this blows up in our faces again I guess we'll have to listen to sanctimonious politicians lecturing us about the evils of "predatory lending practices"... again. Fortunately, we'll probably all be too busy eating our babies to care.

The correct way to artificially close the wealth gap if moral issuses aside would be to spend government money to to find qualified candidates and hire private contractors to create minority owned buisnesses and give them a roadmap for success.

I say moral issues aside, because the only real difference between Poor black people and poor white people is their skin color. Essentially penalizing poor white people because of rich white people. Which is problematic when you consider rich white people don't care about poor white people.

In general it depends on whether you care more about evening up past discrimination or keeping treatment of the poor fair.

I would personally argue that the wealth gap, and the inability for certain minority groups to qualify for mortgages in high numbers, is actually caused by a problem that is already well known and well understood; and working models for how to fix it are already in place.

The American public education system is failing to provide far too many students with the basic literacy, numeracy and financial-literacy skills these children will need as adults to have decent employment opportunities and to manage their lives effectively. While this is a problem that impacts all economic and ethnic groups within the country, this disproportionately impacts poor minority communities. Without these basic skills many of these people are doomed to have low income and low credit scores which prevent them from having access to credit.

Oh God....

I blame the white man

This but also the massive breakdown of the black and hispanic family unit. I don't have the stats with me but I believe something like 75 percent of black children are born to single mothers. Not exactly a recipe for success.

It's certaintly an issue, however weath is actually a bigger issue... as a means... not an end.

People of two different races, of equal educational attainment and achivement often will have drastic outcome differences because of prexisting wealth.

For example, i'm living with my girlfriend getting her through graduate school.  I was unemployed for a long time, and could afford to be, because my parents were comfortably middle class. The only reason I have a job now is because I became friends with a guy, who's friend needed to hire someone he could trust.  (They were both middle eastern, but it shows the value of knowing people with sustained wealth.)

This is the reason why the wealth and income gaps grow despite the fact that we go out of our way to even it.

It's not enough to have wealth, but also sometimes to know somebody who can float you a few bucks.

72%.  For what it's worth.  For what it's worth, the single parent number overall is 25%.

40% histpanic, 24% White.

16% Asian.