by Trad Lyf
The Trump administration, with Ben Carson at Housing & Urban Development (HUD) & Mick Mulvaney at the Consumer Financial Protection Bureau (CFPB), is rolling back Obama-era regulations aimed at strangling businesses with race-based extortion mechanisms in the auto & mortgage industries.
The House passed a bill repealing Obama’s auto lending policy at the CFPB aimed at forcing private lenders to subsidize colored people. Obama’s CFPB looted millions of dollars from major auto manufacturers like Honda & Toyota, who were extorted by the ethically dubious legal theory of disparate impact based on statistics showing that people of color generally paid more for loans.
The US Treasury has recommended reconsidering disparate impact at HUD while civil rights groups sue for provisions in Obama’s Affirmatively Furthering Fair Housing (AFFH) law flowing from the theory. AFFH stemmed from a multi-million dollar disparate impact judgment against Countrywide & Suntrust mortgage in favor of civil rights organizations at the Supreme Court, setting the precedent for Obama’s Affirmative Action housing rule to colonize White neighborhoods.
In a move offsetting the civil rights litigants in tandem with Trump’s Treasury department, Mulvaney’s CFPB has recommended a pull back in reporting requirements vis-a-vis the Home Mortgage Disclosure Act, a subprime lending indicator.
The Obama disparate impact theory is an extension of Clinton’s reasoning for implementing the Community Reinvestment Act, provisions of which necessitated & enabled no-doc liar loans and the smuggling of toxic subprime mortgages in tranches of otherwise healthy securities on secondary markets in structured finance, leading to the flash crash of 2007-8.
The Obama administration expanded the definition of civil rights discrimination to mean anything that does not favor people of color using the precarious legal theory of disparate impact. The theory holds government and corporations accountable for even unintended bias due to deviations in statistical analysis across racial groups. It is essentially a carte blanche for advocacy groups to exploit government and corporations on behalf of litigious clientele.
The Trump administration is rolling back these expansive interpretations of an already controversial law (the Civil Rights Act of 1964) in favor of stricter guidelines. Once the Senate ratifies the House bill, auto manufacturers & lenders will have greater peace of mind regarding their financial planning and analysis outlays and risk management process, likely enabling them to hire more American workers in a move that complements Trump’s America-first trade policy bringing manufacturing jobs home from overseas. Finally, the updates at HUD & CFPB regarding mortgage lending & fair housing rules are a welcome change that should help mortgage lenders & builders underwrite loans & plan budgets in a more confident manner with greater transparency in the industry.