Posts Tagged ‘Gale Cincotta’

States back at the plate

Last week the U.S. Supreme Court granted states attorneys general the power to sue federally regulated financial institutions for violating state fair lending laws. The opinion in Cuomo v. Clearinghouse [PDF] was written by Justice Antonin Scalia, joined by the court’s four liberals. When Scalia says the Bush administration has gone too far, you know we’re in trouble.

Here’s what happened: over the past decade a number of states began passing their own laws and regulations with the objective of curbing predatory practices by financial institutions, especially subprime lenders that disproportionately targeted black and Latino borrowers. Thanks to the Home Mortgage Disclosure Act, one of the great achievements of Gale Cincotta and other community reinvestment activists, it’s possible to identify discriminatory patterns in lenders’ business practices (when they report accurately, which they don’t always).

North Carolina’s anti-predatory lending law was an early and influential one; New York imposed measures too, and then-Attorney General Eliot Spitzer began going after lenders regulated by the New York State Department of Banking. As states took action, the Bush administration’s Office of the Comptroller of Currency did too, first blocking North Carolina’s law and then preempting all states from enforcing their regulations and laws – enforcement that would have curtailed many dangerous and exploitative loan products, features and sales practices.

Thanks to the court’s ruling, states can go after fair lending violations but not other types of infractions outside the scope of this particular case. It also does not give states the power to subpoena prior to the filing of a lawsuit, which has Bob Lawless at Credit Slips suspecting that states will “sue first, supoena later” – “the banks might come to regret what they asked for.”

Saturday, July 4th, 2009 | Tags: , , ,
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A glimpse of Gale Cincotta

cincottaThe soul and conscience of Our Lot is Gale Cincotta, who was a 1960s Chicago housewife when her efforts to improve her sons’ school led her into much bigger battles over the forces besieging city neighborhoods back then – namely the refusal of banks to make home mortgage loans and a misguided, criminally executed effort by the U.S. Department of Housing and Urban Development to remedy that problem. In the early 1970s, that government program sparked a feeding frenzy among real estate agents and lenders for the hundreds of millions of dollars in insured loan money it unleashed; like locusts, they left husks of houses in their wake, devastating city neighborhoods across the country.

As the book chronicles, by the mid 1970s Cincotta became a national player, a central figure behind landmark regulatory reforms – the Home Mortgage Disclosure Act and then the Community Reinvestment Act – that exposed and then discouraged discrimination in lending. I found this picture of her in the archives of the Pratt Center for Community Development, a wonderful Brooklyn-based organization I consult for, from a 1991 conference Pratt hosted. A few great photos of Cincotta turned up in the course of my research, especially at the National Training and Information Center, the organization she co-founded, but was disappointed to find very little video footage of her in action. If anyone out there has any, let me know!!

Saturday, June 13th, 2009 | Tags:
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