Greenlining series: Another ACORN-like menace?

by CalWatchdog Staff | April 16, 2010 9:08 am

This is the fourth part of a series produced by CalWatchdog and the Examiner regarding the Berkeley-based Greenlining Institute, a low-income housing advocacy group that critics say intimidates banks and helped cause the housing meltdown.

By TORI RICHARDS

Both use controversial tactics to force powerful institutions to toe their line, but does that mean the Greenlining Institute and the Association of Community Organizations for Reform Now are two sides of the same coin?

Depends on who you ask.

Greenlining says on its Web site that “since 1993, the Greenlining Institute has blossomed into a major policy player throughout California and the nation … garnering over $2.4 trillion dollars in investments into traditionally underserved areas.”

Even so, Greenlining has purposely flown beneath the radar of public opinion since its inception. That began to change, however, when the subprime meltdown started and ACORN became involved in scandals over embezzlement, voter fraud and questionable loan practices in 2008.

Suddenly, the Internet was rife with exposes like, “California’s Greenlining Institute: Arm-Twisting for Financial Affirmative Action” “The mortgage crisis: who’s to blame?” and “The Greenlining Institute: Shakedown Artists.”

The Community Reinvestment Act of 1977 that empowered groups like Greenlining was now on the radar in Washington, as several Republicans on the House Financial Service Committee were hoping to make it a law of the past.

“Should we repeal the CRA? Absolutely,” said Rep. Jeb Hensarling, R-Texas. “Do we have the votes today? I seriously doubt that.”

Referring to Greenlining and ACORN, Rep. Ed Royce, R-CA, told The Washington Examiner that “armed with the ability to file Community Reinvestment Act complaints with federal bank regulators, this organization could stall or prevent bank mergers or expansion plans.

About Authors

Mark Tapscott
Tori Richards
“In order to avoid these filings, financial institutions would either lower their lending requirements to meet the needs of ACORN associates or they would simply pay out funds to one of the many ACORN-affiliated organizations.

“It appears these actions amount to little more than legalized extortion. The most unfortunate side to all of this is that the American taxpayers are subsidizing these efforts and they will continue to do so until we completely wall off these activist groups from federal funding,” Royce said.

Greenlining’s new Executive Director Orson Aguilar says his group isn’t anything like ACORN.

“It would be an ignorant comparison, our work is totally different,” he said. “We got attacked last year by conservative media and we had nothing to do with ACORN. We were being successful at advocating. It means we’re being effective.”

Its advocacy is meant to bring healthy commerce to low-income areas and in turn that helps the banks garner more business, Aguilar said.

Greenlining founder Robert Gnaizda said he even warned former Fed Chairman Alan Greenspan in 2004 that subprime lending trouble was brewing and it was wrong to blame Greenlining for the crisis.

“I was the first one to tell him,” he said.

Other experts are not convinced.

“It’s all the bank’s fault, the borrower never makes a mistake,” intoned Edward Pinto, the former chief credit officer of Fannie Mae. “The community groups with the support and assistance of Congress and the support of HUD have accomplished this crisis.”

Pinto tries to spread the word about the dangers of low-income funding via newspaper editorials and congressional hearings. Last September, he testified before the House Committee on Financial Services on which Royce and Hensarling serve.

“We’ve got this culture today that everybody deserves to have a house, health care or whatever handed to them regardless whether done anything to deserve it,” Pinto said. “The general public does not agree with that.”

About the series authors:

Tori Richards is CalWatchdog’s special projects reporter. She is a Pulitzer Prize nominee who has worked for CBS News, Reuters, the New York Post and Bloomberg.

Mark Tapscott[1] is the Examiner’s editorial page editor. Before joining the Examiner in 2006, he was director of The Heritage Foundation’s Center for Media and Public Policy and founded its Database 101 Computer-Assisted Research and Reporting Boot Camps at the National Press Club. He’s a former assistant managing editor and managing editor for two other Washington region daily newspapers. He is also proprietor of Tapscott’s Copy Desk blog[2].

Source URL: https://calwatchdog.com/2010/04/16/new-another-acorn-like-menace/

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