Our favorite racist activist lawyers at the Justice Department Civil Rights Division are back. Last week, the CRD reached a settlement with two subsidiaries of American International Group (AIG) for at least $6.1 million. (Talk about kicking a dead horse.) The lawsuit, as with almost every lawsuit brought by the Civil Rights Division, was based on race.
The settlement was filed today in conjunction with a complaint made by the Justice Department in U.S. District Court in Delaware. Brought under the federal Fair Housing and Equal Credit Opportunity Acts, the complaint alleges African American borrowers nationwide were charged higher fees on wholesale loans made by AIG Federal Savings Bank (FSB) and Wilmington Finance Inc. (WFI), an affiliated mortgage lending company.
AIG didn't intentionally charge African-Americans with higher fees. The CRD's complaint was on the basis of disparate impact, which bans lending practices where the intent isn't discriminatory but the outcome is. What probably happens is that black homeowners are charged more by insurance companies in general, not because of their race, but because the actuaries assess this demographic as being poorer and a higher risk.
Maybe the CRD thinks we should just crash the entire housing industry all over again? The single largest factor in the housing bubble collapse was the Community Reinvestment Act, which mandated that a certain percentage of loans be made to minorities. The hope was that more blacks and Latinos would end up able to purchase homes. The result was that mortgage companies were forced to make countless subprime loans that couldn't be paid back. This pumped more and more air into the bubble until it finally popped.
The CRD proudly announced that this is the first time a mortgage company has been sued based on racial factors and that it won't be the last. Under disparate impact, they can sue pretty much any company that charges an average of one cent more for minorities than whites. The Obama Administration and its executioners have, it seems, learned nothing.
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