04.30.2010 0

Dodd Financial Takeover Bill Recreates ACORN Within Government Agencies, Research Shows

  • On: 05/23/2010 22:52:50
  • In: Stop ACORN!
  • By Kevin Mooney

    Does the now passed so-called Senate financial overhaul bill re-establish the controversial organization, ACORN, as part of new government agencies? Even worse, does the legislation intend for those new government agencies to actually replicate ACORN’s questionable financial practices?

    These questions are explored in an alarming report from Brian Johnson, a meticulous researcher with Americans for Tax Reform (ATR). Sen. Chris Dodd’s 1,400 page bill could possible recreate ACORN within the framework of government agencies, he suggests.

    Even as the New York Times and other media outlets remains fixated on the “risky behavior” of financial companies in its reporting, it should carefully consider the motivations of federal office holders.

    Johnson’s could bring some balance and perspective to the newspaper’s ongoing coverage of Dodd’s bill. While it’s important for The Times and other major publications to report on the trajectory of pending legislation, they should focus more attention on the policy details. Sen. Chris Dodd’s finance bill would possibly recreate the controversial ACORN within new government agencies, according new research. It’s a debatable proposition but the research is precise and detailed enough to warrant coverage and attention.

    Per Johnson, Section 1013(b)(2) of the Dodd bill a community affairs unit: “The Director shall establish a unit whose functions shall include providing information, guidance, and technical assistance regarding the offering and provision of consumer financial products or services to traditionally underserved consumers and communities.”

    Johnson writes that this is a similar purpose as ACORN, which “on its website, describes itself using similar language.” He points to this statement, “ACORN is the nation’s largest grassroots community organization of low- and moderate-income people… ACORN has been building community organizations that are committed to social and economic justice, and won victories on thousands of issues of concern to our members, through direct action, negotiation, legislative advocacy and voter participation.”

    Wrote Johnson, “Although ACORN’s website uses more obvious language, the goals of both the would-be Community Affairs department and ACORN are the same: force the government to provide loans to people who otherwise wouldn’t qualify for it.” Specifically, the community affairs unit’s specific task would be to assist organizations that support “underserved consumers and communities” like ACORN, probably to achieve community development block grants.

    In 2009, the $787 billion “stimulus” included some $3.9 billion in grants that non-profit community development housing groups are eligible for. Therefore, the community affairs unit could become a means of directing the allocation of those grants.

    According to Section 1017 of the bill, the Consumer Financial Protection Bureau that houses the community affairs unit would operate on base funds directly from the operating expenses of the Federal Reserve Board of Governors, rising from $390 million in 2011 to $468 million in 2013. The section would also establish a “consumer financial protection fund” that would charge penalties and fines to lending institutions to be redistributed to “victims,” presumably of “predatory” lending. This will enable the community affairs unit to exert leverage upon lending institutions to make questionable loans once again that were the ACORN Housing Corporation’s trademark.

    The political gamesmanship that has consumed the most recent reports in The Times is not unimportant. But they do not cut into the substance of the proposed public policy changes. Johnson’s research cuts right to the heart of financial practices that have severe ramifications for the American economy.

    Here is how Johnson concludes his report, “The genesis behind the current economic downturn is consumers defaulting on real estate loans, a nearly universally accepted fact. Senator Dodd’s bill mimics this precarious practice by instituting a Community Affairs department. Though the goal, increased homeownership, of such programs is noble, such policies will only lead to another housing bubble, and burst.”

    This is kind of savvy analysis that would greatly benefit readers who remained uninformed as to the particular elements of Dodd’s legislation. Instead The Times places greater weight in needling the opposition.

    “Senate Republican leaders, adopting an election-year strategy to oppose virtually every initiative supported by the Obama administration, also voiced loud criticism of the legislation while trying to insist that they still wanted tougher policing of Wall Street,” a recent report says.

    “The Republicans, who had a strong role in drafting the bill and won a number of their amendments, seemed to be calculating that voters these days trust the federal government even less than Wall Street and what accept the Republicans’ contention that Democrats in Washington are in cahoots with bank behemoths like Goldman Sachs,” the report continues.

    If there a compelling rationale behind greater government control over industry as The Times implies in its reporting, than it should offer up more details about the particular elements of the legislation.

    On April 1st, ACORN, which stands for the Association of Community Organizers for Reform Now, announced that it was dissolving its existing national structure. However, former and current ACORN insiders have said that ACORN merely remarketing and rebranding itself so that it will be better positioned to receive new donations in the wake of last year’s scandals.

    “Always note the date, April 1.” Marcel Reid, a former board member has observed. “ACORN is not dissolving, it may be morphing, but it is still in business and it is still in a position to receive funding, although it may be done under different names.”

    Reid current chairs ACORN 8, a whistleblower group named for the eight board members who first revealed the questionable financial transactions that became the subject of congressional investigations. ACORN 8 continues to press for a forensic audit and a wider investigation.

    Some of renamed ACORN affiliates tracked by the House Oversight Committee are as follows:

    In California, ACORN is now the Alliance of Californians for Community Empowerment (“ACCE”). In Massachusetts, Rhode Island, and Connecticut, ACORN is New England United for Justice. In New York, ACORN is New York Communities for Change. In Arkansas, ACORN has become Arkansas Community Organizations (“ACO”). In Louisiana ACORN is “A Community Voice.” In Missouri, ACORN is Missourians Organizing for Reform and Empowerment (“MORE”). In Washington State, ACORN is Organization United for Reform (“OUR”) Washington. In Minnesota, ACORN is Minnesota Neighborhoods Organizing for Change. In Pennsylvania, ACORN has become the Pennsylvania Communities Organizing for Change (“PCOC”) and Pennsylvania Neighborhoods for Social Justice, Inc. In Texas, ACORN is now the Texas Organizing Project.

    Finally, the ACORN Housing Corporation recently also changed its name to Affordable Housing Centers of America. It remains eligible for federal funding to date.

    Kevin Mooney is a contributing editor to ALG News Bureau and the Executive Editor of TimesCheck.com.

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