"An increasingly desperate Republican attack machine has recently identified the community organizing group ACORN as Public Enemy Number One," say The Nation's Peter Dreier and John Atlas in a terrific piece about the GOP smear campaign. The smears hide the truth about the organization (and that might even be the point). ACORN, which is most famous (until this year) for its work helping impoverished tenants and homeowners protect their homes from landlords and predatory lenders, has been warning for years about the potential meltdown from unscrupulous lending practices.
As the authors say,
ACORN has persistently called for stronger regulations on banks, private mortgage companies, mortgage brokers and rating agencies. For years, ACORN has alerted public officials that the industry was hoodwinking many families into taking out risky loans they couldn't afford and whose fine print they couldn't understand.
As the banks developed more and more aggressive strategies for pushing people in over their heads financially, ACORN--which could see from its on-the-ground perspective the predatory loan bonanza's toll on poor and minority communities--was often a lone voice crying out for sanity.
Many families now losing their homes now see what ACORN warned about, namely that lending institutions (one hesitates to call them "banks") were misleading people into mortgages they couldn't afford over the long-term, not telling them that the low interest rate they started with could easily rise.
As Dreier and Atlas conclude,
ACORN joined other consumer advocates and lawyers to promote the notion of "assignee liability"--arguing that companies that buy, and profit from, loans bear responsibility for illegal acts committed when those loans were originally made. Without it, the mortgage originators, who typically hold loans briefly before they sell them, can make fraudulent or risky loans without suffering any consequences. Again and again, Wall Street argued that it was too burdensome to scrutinize the loans they were buying or to be held responsible for the original transactions.
Several of ACORN's battles were notably successful. It got some major lenders to reduce the outrageously high interest rates and fees they charged borrowers. For example, in 2001 ACORN persuaded Household Finance Corporation to abolish its practice of selling bogus credit insurance that had been costing a billion dollars a year straight out of homeowners' pockets. ACORN's activism spurred state attorneys general to sue Household Finance in 2002, forcing the firm to distribute a record $484 million to abused borrowers. In a separate suit against Household Finance, ACORN won a $150 million settlement that it put partly into a foreclosure prevention fund.
But ACORN and its counterparts have only been able to stick their fingers in the crumbling dike of American finance. Their warnings were prescient, but their victories were too small, their opponents too strong. So it is richly ironic that John McCain--a longtime ally of the banking industry whose mentor Phil Gramm orchestrated the 1999 Financial Modernization Act, opening the floodgates to irresponsible lending practices--is trying to scapegoat ACORN for the subprime crisis. Powerful business groups and their right-wing allies will continue to attack ACORN because it exposed and battled the real culprits of the financial crisis.
Some are saying, even on this site, that ACORN is too big a liability for us, and that we need to cut them loose. I think the opposite is true. If we throw ACORN under the bus, we throw out a lot of good work and a long history of fighting for people without a voice. Not to mention letting the GOP shape the dialogue and (not coincidentally) hide their own culpability in the foreclosure crisis that is behind this entire financial mess.
As Progressives, we need to understand ACORN's thankless work over the years and defend it now as it has become the target of a pretty concerted GOP attack meme. The group has been quietly doing the hard work of organizing families who have few resources and little access to power. While it may be true that the organization's rapid growth in recent years has led to problems in oversight, it has made progress addressing concerns and deserves our support.