What is the Center for Responsible Lending?

On Wednesday, we brought you the story of a little report from the Boston Fed and its role in creating the housing bubble. In that piece, we mentioned an organization you probably hadn’t heard of before, the Center for Responsible Lending. It is one of the more influential–in a bad way–organizations you don’t know. Over the coming weeks, we’ll lift the veil on this organization. Consider today’s installment a primer.

The Center for Responsible Lending is the most influential liberal advocacy group dealing with the financial services industry in the nation’s capital. It is the policy arm of credit unions based in North Carolina and California. Yes, its parent organization has a vested interest in the outcome of CRL’s advocacy.

The Center performs both public policy research and lobbying. (Lots of lobbying, but that is for another day.) Despite its well known left wing prejudices, the media uncritically accepts the Center’s published papers, giving the group extra heft on Capitol Hill.

The Center aggressively criticizes lending discrimination and pushes lenders to increase their underwriting to poor neighborhood where borrowers are less likely to be able to pay back mortgages. The Center is keenly interested in the redistribution of wealth and cares little about the financial safety and soundness of the banks it targets.

Lenders who fail to cooperate with the Center are accused of “redlining,” i.e. illegally discriminating against borrowers in low-income neighborhoods.

Redlining is a scarlet letter banks are desperate to avoid having pinned on them so they go out of their way to appease the various anti-capitalist shakedown groups including but not limited to National Council of La Raza, ACORN, Neighborhood Assistance Corporation of America (NACA), Greenlining Institute, National Action Network (Al Sharpton), and Rainbow/PUSH Coalition (Jesse Jackson).

At the same time as the Center scolds banks that supposedly don’t lend enough money in poor communities, it also excoriates lenders it considers to be involved in so-called predatory lending. Of course, the Center defines what it considers “predatory.” Lenders are damned if they do, and damned if they don’t.

The Center is headed by liberal crusader Martin Eakes. In 2008 Politico referred to Eakes as the “main intellectual engine driving Democratic responses to the housing crisis.”

The Center’s primary benefactors over the years have been the subprime mortgage speculators Herb and Marion Sandler who have given the nonprofit at least $20 million.

Unlike higher profile high-dollar liberal donors such as George Soros and insurance tycoon Peter B. Lewis (his company is called Progressive for a reason), the Sandlers have received very little media attention. They shelled out $13 million to left-wing groups in a failed effort to prevent President Bush’s reelection in 2004. This made them the third most generous donors in 2004 behind Soros ($27 million) and Lewis ($23 million).

The Sandlers have also given sizeable chunks of cash to the highly influential Center for American Progress, the liberal “action” tank run by Obama transition co-chief John Podesta. Incidentally, Podesta’s outfit recently put disgraced former green jobs czar Van Jones on the payroll. Jones is the self-described revolutionary communist forced from office last year when it was discovered that he was a 9/11 truther.

A longtime champion of the discredited Community Reinvestment Act (CRA), the Center refuses to acknowledge the role the catastrophic legislation played in creating the subprime mortgage bubble the showered the Sandlers with billions of dollars in profits. To the leftist ideologues at the Center, more vigorous enforcement of the CRA could have averted the current financial crisis:

“Had regulators leveled the playing field through common sense underwriting requirements and more vigorously enforced CRA requirements instead of allowing a race to the bottom, this crisis would have been averted.”