.Upfront: Kleptocracy of dunces

The age of Trump and the fight for housing justice

By Tom Gogola

A dismayed Donald Trump voter made headlines last week after the president-elect announced the selection of the controversial California mortgage vulture Steven Mnuchin for Treasury secretary.

An Associated Press (AP) story on Teena Colebrook highlighted that the Southern California resident had been one of thousands of homeowners to lose their homes to foreclosure in the aftermath of the Great Recession in 2007-09. Colebrook, who also owned rental properties, put the onus on Mnuchin and OneWest Bank—as did a recent complaint against the bank.

In the run-up to Mnuchin’s pick, two California nonprofits, the California Reinvestment Coalition and the San Rafael-based Fair Housing Advocates of Northern California (formerly Fair Housing of Marin), filed a federal complaint against CIT Group and its subsidiary OneWest Bank under the federal Fair Housing act that centered on racially-discriminatory redlining charges in the banks’ lending practices throughout California between 2014 and April of this year.

The groups asked that Housing and Urban Development (HUD) investigate CIT Group (OneWest is a subsidiary of CIT via a 2015 merger orchestrated by Mnuchin and other investors, which included George Soros) after its own study found that OneWest “has no significant branch presence in communities of color, and not surprisingly, its home loans to borrowers and communities of color are low in absolute terms, low compared to its peer banks, and low when compared to what one would expect, given the size of the Asian-American, African-American, and Latino populations in California.”

The nonprofits found that OneWest had originated only two mortgage loans to African-Americans between 2014-15, and that the bank was “far more likely to foreclose in communities of color than to make loans available to people in these communities,” which included parts of Solano and Contra Costa counties.

Kevin Stein spearheaded the OneWest investigation at the California Reinvestment Coalition (CRC). Mnuchin, he says, is exactly the wrong person to be put in charge of the Treasury Department. “The bottom line and our concern is that he ran a highly problematic bank that harmed tens of thousands of Californians to the point of foreclosing on them, and profited handsomely in doing so,” says Stein, who serves as the CRC’s deputy director. “He is not the person we need in charge of the economy and regulating the financial system.”

The questions are mounting, and even if some of them are in the weeds of deep policy, Stein says it’s time for concerned lawmakers of all political stripes to take note of the implications. As we spoke on Friday, Stein noted that, “Just today, the House is considering a bill—and this almost sounds like it’s made up—that would allow the Treasury secretary to decrease oversight of 27 of the 28 too-big-to-fail banks, which include CIT. Potentially Mnuchin would be in a position to decide that his bank should be subject to less regulation.”

For voters like Colebrook, it appears that the business principle of “caveat emptor” may need an addendum in the Trump administration that reads, “Buyer beware, and expect to be screwed over.”

The ironies of Trump’s rollout are not at all lost on Stein, who recalls a candidate Trump who all in one breath blasted Federal Reserve Chair Janet Yellen, the billionaire-liberal George Soros and Goldman Sachs.

“Mnuchin has ties to Goldman Sachs, Soros is his partner in OneWest—he is one of five or six billionaires who bought the bank—and the Federal Reserve gave approval of the bank merger,” between CIT and OneWest, Stein notes.

Each day’s big headline about the presidential transition seems to bring new news of another swamp creature, another throne-sniffer, news-faker, dinosaur-denier, mad dog or fundamentalist of the market and/or Christian variety being named to the Trump Cabinet.

Where an increasingly high number of Americans, if not electoral-college voters, are wondering whether this country is entering an era of governance by kleptocracy, Colebrook now says she  wishes she had stayed home and not voted at all. For her, the personality has failed the cult.

But not quite, and that was the most telling part about the story on Colebrook, who was subsequently subjected to varying degrees of abuse across social media over whether anyone should feel sorry for her. The hallmark of any cult of personality is a visceral and unimpeachable feeling of a one-on-one connection with the leader. Take that away, and watch the eyes go hollow with bewilderment. Watch the impeachment hearings unfold. Colebrook told the AP that she “wishes she could meet with Trump to explain why she feels betrayed by his Cabinet selection after believing that his presidency could restore the balance of power to everyday people.”

And yet it appears that Trump did not reach out to Colebrook and instead was calling the president of Taiwan, and tweeting about Saturday Night Live and moving on to his choice of best-post-primary pal Ben Carson for the top post at HUD.

The African-American neurosurgeon has limited experience running large government bureaucracies, but he does have a history of open animosity toward the very federal housing programs that he will now oversee—the very agency that will rule on whether there’s any reason to believe Steve Mnuchin’s bank discriminated against African-Americans and other minorities.

There’s a great line from ’60s folkie Joan Baez—“Action is the antidote to despair”—and Caroline Peattie at Fair Housing Advocates sings its refrain when she says that since the election “organizations like ours are feeling beleaguered, and are also feeling more strongly than ever that we really need to put our noses to the grindstone and work to ensure that we can do everything we can to help civil rights of consumers.” On Monday the group joined with 19 civil rights groups and the National Fair Housing Alliance in a lawsuit filed in the San Francisco federal district court against lending giant and superstar of the 2007-09 Great Recession, Fannie Mae. The suit alleges that Fannie Mae doesn’t keep up its for-sale foreclosed properties in minority neighborhoods despite numerous attempts to get them to do so. The suit details the consequences of inaction, which include fostering downtrodden neighborhood conditions that encourage vandalism and other crime, poor health and negative impacts on everyone’s home values where Fannie Mae isn’t keeping up with maintenance.

Housing is just one on a list of numerous challenges emerging from the bowels of the emergent kleptocracy. Consumer protection, criminal justice reform: Trump and his looming administration present numerous challenges to groups like Fair Housing Advocates—up to and including the fate of Obama-era initiatives and legislation, such as the Consumer Financial Protection Bureau and the Affordable Care Act. Peattie says, “There’s so much going on, where to even start?

Let’s stick with Mnuchin for the time being. Peattie piled on to a growing demand, and a Congressional promise from select Democrats, to hyper-scrutinize Mnuchin during his senate hearing, noting his “blatant disregard for consumers, consumer protections and civil rights.”

Closer to home, there’s plenty of available action to keep the despair and the kleptocrats at bay. Peattie says the alliance recently changed its name to better reflect the housing-justice work it already was doing around the North Bay and to make it easier for local jurisdictions to work with them. “We are going to fight the good fight,” she says.

Pacific Sun
The Pacific Sun publishes every Wednesday, delivering 21,000 copies to 520 locations throughout Marin County.


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