The Plain Dealer’s editorial on short-term lending in the state misrepresented the facts (“Payday lenders keep right on fleecing Ohioans,” March 16). Currently, short-term lenders in Ohio are operating under the Small Loan Act, just as legislators requested last year. This law allows borrowers to receive loans of $500 or more at 28 percent APR with a one-time fee that can’t be rolled over or compounded.

Major banks such as Wells Fargo and Fifth Third have been offering loans under these same rules for years. Incredibly, interest groups are attacking only those organizations that previously offered payday loans. The group behind these attacks, the Center for Responsible Lending, is not responsible at all. This lobbying organization is funded by Herb and Marion Sandler, billionaire financiers who made their fortune offering the worst kinds of subprime, adjustable-rate mortgages.

During these tough economic times, credit is already hard enough to come by in Ohio. Further restriction of short-term loans would do nothing to reduce the financial need of individuals, and would only leave them struggling with another challenge to overcome.

Just who is the man Herb Sandler? First he’s embroiled in scandal and second he’s a liberal financier of left-wing causes. I posted back on Feb. 16th the story from 60 Minutes that him and his wife bilked people into engaging in loans where their payments didn’t even cover the interest on the loan — so these poor people got poorer and poorer every time they made a house payment.

And why did he found Center for Responsible Lending?

He writes:

They, along with their political and ideological ally George Soros, are among the top five funders in America of 527 groups that promote a liberal agenda.

Major media have begun to scrutinize the Sandlers’ role. Time magazine has listed them among the 25 people most responsible for our crisis. Last Sunday, CBS’ “60 Minutes” featured a segment on World Savings. The “Pick-A-Pay” methodology was the focus. A whistleblower, Paul Bishop, was the star. He had warned the top management at World Savings that loans were being aggressively promoted and made to people with little or no regard for their ability to afford them. The term “Enron” was waved about like a red flag but to no avail.

The Center for Responsible Lending has been extremely quiet about the Sandlers. 

Both the transcript and full video segment are available online.

An excerpt:

In fact, Herb and Marion Sandler were legendary. In 1963, they started Golden West Financial and grew to 285 branches under the name World Savings. The Sandlers’ were known for careful, conservative lending. They’ve given away millions of dollars to charity and started an advocacy group for low income borrowers called the Center for Responsible Lending.

In 2006, just before the housing crash, the Sandlers sold their bank to Wachovia and pocketed $2.3 billion.

Trouble is, some of their money came from people like Betty Townes, who is financially ruined after being sold a series of World Savings mortgages she couldn’t afford.

Reminds me of an old Alanis Morissette song.

Here’s the Deceiver-worthy part: While Herbert Sandler is ripping off the poor, he’s giving gajillions of dollars to nonprofit groups that crusade against just this sort of thing. One of them is the Center for Responsible Lending, which he and his wife helped found.

Responsible Lending?

Sandler gave the group $5.2 million in 2005, and another $7 million in 2007. Sounds like a weak-ass effort at conscience scrubbing to me.

Responsible Lending. Responsible Lending. Responsible Lending. If you say it enough times, it loses all meaning. Maybe that’s how Sandler did it too…

Maybe the point is that if he funds them, he controls them. So they can criticize everybody but him.

Topping all these groups, however, is the Center for Responsible Lending. Through the middle of last year, the Sandler Foundation had given nearly $20 million to the CRL, whose idea of “responsible lending” does not include loans that make economic sense for banks and their investors, but rather loans that fulfill the Left’s notion of social justice. The CRL is a professional grievance organization that concentrates on accusations of racial redlining. In recent weeks, its main project has been to defend the Community Reinvestment Act, which encouraged subprime lending, against charges that it played any role in Wall Street’s financial crisis. “These are the very people who have destroyed the American credit system,” says Jerry Bowyer, the chief economist at BenchMark Financial Network

From the article:

The Center for Responsible Lending is an interesting place to hover for a minute. The organization markets itself as a resource for “predatory lending opponents”, and it is taking on such practices as sub-prime lending, pay-day lending, overdraft loans and refund anticipation loans, among other things.

 In the Times Magazine piece about the Sandler’s philanthropic activity, they said:
“It starts with outrage,” said Herb. “You go a little crazy when power takes advantage of those without power. It could be political corruption — ”
“Or subprime lending,” Marion interrupted.
“The story of subprime is worse than anyone has written so far,” Herb said, shaking his head in dismay.
“It is,” Marion said, nodding in agreement.

So where’s the outrage, Mr. and Mrs. Sandler, at the way in which your own Pick-a-Pay invention has allowed thousands of people to acquire more debt than they could reasonably pay off? It doesn’t matter that they started out with good credit. Allowing a person with a solid credit rating and a $130,000 annual household income buy a home he cannot afford is just as irresponsible and exploitative as allowing someone with bad credit and $30,000 a year in income buy a home he can’t afford.