- The Washington Times - Tuesday, October 13, 2009

Conservative Republicans are capitalizing on the troubles of community activist group ACORN - ranging from charges of voter registration fraud to embarrassing videos of its employees - to revive a long-standing fight against a federal law that grades banks on their investments in poor and minority neighborhoods.

The 1977 Community Reinvestment Act (CRA) was intended to end “redlining,” a practice in which banks in effect walled off many inner-city neighborhoods from mortgage loans. But some GOP lawmakers say it has outlived its purpose and is being used inappropriately by ACORN to shake down banks for money. They want to repeal the law, scale it back or at least block a Democratic proposal to expand it.

Critics of the law are linking it to ACORN - a subject many Democrats wish would go away - at every opportunity.

“Should we repeal CRA? Absolutely,” said Rep. Jeb Hensarling, Texas Republican, a member of the House Financial Services Committee. “Do we have the votes for it today? I seriously doubt that.”

ACORN said that nearly all the money it receives from banks is used to provide advice to first-time home buyers or homeowners who are at risk of losing their homes to foreclosures, and that the money isn’t used for political advocacy.

“The Republicans are attempting to intimidate banks to halt monies that are used to help working families become homebuyers or save their homes from foreclosure,” spokesman Brian Kettenring said.

Archived ACORN testimony on the Federal Reserve Web site shows ACORN has spoken against bank mergers, contending that banks weren’t living up to the CRA. In at least one case, however, ACORN supported a merger. The group acknowledged in the 1998 testimony that it was unusual for it do so, but said one of the banks involved, NationsBank, was a leader in community reinvestment, and that its partnership with ACORN Housing Corp. had produced at least $236 million in mortgages.

A decade ago, Sen. Phil Gramm of Texas unsuccessfully tried to gut the law, describing nonprofits that use the law as “protection rackets.”

Recent troubles at ACORN are giving Republicans ammunition in their renewed campaign against the law. Some employees are accused of voter registration fraud. Its founder was forced out last year amid revelations that he had tried to keep quiet his brother’s embezzlement of nearly $1 million. Two conservative filmmakers disguised as a prostitute and a pimp caught ACORN employees on camera giving them tax and immigration advice and advising them to disguise the source of their income to get housing aid.

ACORN, short for the Association of Community Organizations for Reform Now, portrays itself as a successful advocate for tens of thousands of low-income and minority homebuyers. It appointed a former state attorney general to investigate the video scandal.

The history of the relationships between banks and groups like ACORN goes back to President Carter’s signing of the CRA in 1977.

The neighborhoods targeted for help by the law were typically in areas where groups like ACORN already were working. Banks initially resisted the overtures, but over time saw a viable market for lending in minority communities, with community organizers in a supporting role counseling potential borrowers.

“The relationships between banks and groups like ACORN weren’t necessarily marriages made in heaven, but they’ve consistently worked well,” said Gregory Squires, a George Washington University professor who has written about ACORN.

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