Subprime Non-Bank Lenders Ask
Obama and Geithner for Bailout, in Guise of Stimulus
Byline: Matthew R. Lee of Inner
City Press on Wall Street: News Analysis
NEW YORK, February
10 -- The abuse of the
subprime-triggered U.S. bailout fund has reached a new high, or low,
trade association for non-bank subprime lenders asking to be eligible
Troubled Assets Relief Program funds. In a February 5
letter to Barack Obama, copied
to Timothy Geithner and Larry Summers, the American Financial
Association argues that while "to date, the majority of the federal
government's financial relief programs have been directed toward
depository institutions... a campaign to get credit into the hands of
must also encompass finance companies." Inner City Press first obtained
the letter from SNL Interactive.
board of directors includes, as incoming chair, a representative
financial company World Acceptance. This South Carolina-based company
has been described
as "below-subprime" by SmartMoney, for example, and as making
"small, expensive loans to paycheck-to-paycheck types, mostly in
Southern states." Now this type of company is in line to get bailout
funds, in the guise of stimulating the economy.
letter to Obama goes on to say that "many finance companies rely
lines of credit to fund loans to consumers. For this reason, we ask the
administration to ensure that, if these banks accept TARP money, they
these lines of credit open and fluid."
to the predatory-lending triggered meltdown, consumer groups like
Finance Watch documented to the Federal Reserve that, for example, Bank
America, JPMorgan Chase, Citigroup and Wells Fargo were financing and
enabling payday lending firms. Inner City Press sued
the Federal Reserve under the Freedom of Information Act to gain access
list of finance companies lent to by Wachovia, since failed and bought
argument is made that banks' should be required to lend to subprime
companies as a condition of their bailout funds.
Geithner raises glass, Bernanke and Summers
smile, AFSA's TARP not yet shown
novel arguments are merely an extension of currently accepted abuses.
finance company with a subprime component, was allowed to become a bank
company with no public notice or comment, in order to receive bailout
Ocwen, a subprime mortgage servicers, has applied to the Federal
Reserve to buy
a small Texas bank, in order to gain access to bailout funds.
argument seems to be, why even go through these contortions? Why not
funnel bailout funds to the very subprime lenders which triggered the
crisis? And perhaps Obama, Summers and
Inner City Press on Geithner (video stream) click here
Click here for Inner City Press'
review-of-2008 UN Top Ten debate
Click here for Inner
City Press' December 24 debate on UN budget, Niger
Click here from Inner City Press'
December 12 debate on UN double standards
Click here for Inner
City Press' November 25 debate on Somalia, politics
Click here for Inner City
Press Nov. 7 debate on the war in Congo
Watch this site, and this Oct. 2 debate, on
UN, bailout, MDGs
and this October 17 debate, on
Security Council and Obama and the UN.
* * *
usually also available through Google
News and on Lexis-Nexis.
for a Reuters
AlertNet piece by this correspondent
about Uganda's Lord's Resistance Army. Click
for an earlier Reuters AlertNet piece about the Somali
Reconciliation Congress, and the UN's $200,000 contribution from an
undefined trust fund. Video
UN Office: S-453A, UN, NY 10017
Reporter's mobile (and
earlier Inner City Press are listed here, and some are available
in the ProQuest service, and now on Lexis-Nexis.
2006-08 Inner City Press, Inc. To request
reprint or other permission, e-contact Editorial [at]