Martin, Fannie & Freddie
April 28, 2009 | Center for Responsible Lending | Comments (0)In 2005, Fortune Magazine wrote a powerful column comparing Fannie May to Enron. The subtitle said it all: “This is not your ordinary accounting fraud. Yes, there’s the matter of $9 billion in overstated earnings. But the fight over Fannie is a nasty political showdown where everyone has his own agenda. And it’s not over yet.”
Of course, this wasn’t enough to bring about the necessary changes that might have prevented the housing meltdown. And Fannie, of course, was aided and abetted by credible-sounding leaders representing “nice-sounding” organizations. For example, in the past, I’ve written about the Center for Responsible Lending — a liberal organization that is largely responsible for the housing crisis.
It turns out that when others tried to sound the alarm about some of Fannie’s questionable practices back in 2005, Martin Eakes (the founder of the Self-Help Credit Union who was in the subprime lending business with Fannie) — defended Fannie and accused critics of conducting a ‘hatchet job’.
CRL founder believes in “risk-based” pricing
March 12, 2009 | alternatives, industry, states | Comments (0)Martin Eakes, the founder of the SELF-HELP Credit Union the and Center for Responsible Lending, appeared before the Senate Banking Committee in 2001:
We believe in risk-based pricing; in fact, Self-Help has engaged in it for 17 years. Loans with higher risk should bear an appropriately higher interest rate in order to compensate lenders for this risk. We believe, however, that the risk should primarily be paid for through higher interest rates rather than fees..,
Granted, he was talking about mortgages, but why should the principles be different for payday loans?
