While Schumer was writing his letters, a left of center ‘community’ group named the Committee for Responsible Lending was preparing its own attack on the bank. The same week as Schumer’s leak, they released material to the press accusing Indy of mistreatment of minority applicants. There are literally hundreds of small activist ‘public interest’ law firms, ‘community’ activists, think tanks and advocacy groups around the country that make their living attacking mortgage lenders. These groups label bankers racist if they hesitate to lend in neighborhoods in decline or to minority applicants with spotty credit histories. If the banks then decided to approve the loans, but charge a higher level of interest to compensate for the higher level of risk, then these groups accuse them of ‘predatory lending’. If the banks are proven right, and the borrowers refuses to repay the borrowed money, then the banks are smeared for their ‘greed’ in making the loans in the first place. The Committee for Responsible Lending is a sort of umbrella organization for these groups. Large donors can donate to the cause by donating to CRL and letting them spread the money around.
Well, they went after Indymac, and the result is the second largest bank failure in US history. Of course, we’ll hear a lot about ‘greed’ this week, and we should. But whose greed? Schumer’s greed for power? Community activists' greed for shakedown money? Trial lawyers greedy for huge class action settlements? Hedge fund managers who write big checks to these groups and the Democratic Party (including Schumer’s Democratic Senatorial Campaign Committee) and then turn around and make mountains of money shorting mortgage paper? No, we’ll hear about none of the above from most in the media. The real culprits will have gotten away with it, and the victims will bear the blame.