To the People

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or TO THE PEOPLE.

Wednesday, October 29, 2008

Obama Will Crack Down On the Subprime Lenders Just As Soon As The Check Clears

There's some good muckraking in the Moonie Times today. Obama has been promising to crack down on the predatory lenders in the subprime mortgage crisis. Luckily for him, they'll be easy to find:
John W. Courtney's world collapsed at dinnertime on a Friday in July 2001. That's when he learned from a television newscast that much of the $200,000 that he had saved from his construction job over a 30-year period was lost when his Chicago-area bank was shut down after pursuing a failed strategy of subprime loans.

Seven years later, the Vietnam War veteran has yet to recoup $85,000 of his uninsured losses from Superior Bank's failure. And he watches in disbelief as one of the bank's former top officials, billionaire hotel heiress Penny Pritzker, leads the record-breaking fundraising machine of Democratic presidential candidate Sen. Barack Obama.

Mr. Courtney, now 63, wonders aloud how Mr. Obama could rail on the campaign trail against the national financial crisis started by subprime lending while allowing a former advocate of the practice to hold the senior position of finance chairwoman in his campaign. The candidate has even lauded Ms. Pritzker's business practices as a model for an Obama administration.
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The Office of Thrift Supervision (OTS), a Treasury Department agency that regulates federal savings associations, closed Superior and its 18 branch offices on July 27, 2001, naming the FDIC as conservator. At the time, the FDIC said the bank's financial condition had "rapidly deteriorated" and its management was "unable to resolve existing problems.

A Feb. 7, 2002, FDIC report said the bank's failure "was directly attributable to the bank´s board of directors and executives ignoring sound risk management principles." The report said the bank "paid dividends and other financial benefits without regard to the deteriorating financial and operating condition of Superior."

"Superior Bank suffered as a result of its former high-risk business strategy, which was focused on the generation of significant volumes of subprime mortgage and automobile loans for securitization and sale in the secondary market," the OTS said. "The bank also suffered from poor lending practices, improper record keeping and accounting, and ineffective board and management supervision."