Michael Schaus

Eric Holder’s idea of implementing justice is to shake down banks on trumped up charges based on vague statistics and leftist theories. Holder’s Department of Justice recently leveled a $100 million fine against Ally Bank for “racist” lending practices without a shred of evidence. And Ally’s not the only victim of Obama/Holder Inc.’s protection racket. Apparently, the post-racial presidency of Barack Obama has decided to extort almost a billion dollars from capitalist institutions under the unjustified pretense of ‘race-based’ predatory lending.

The recent settlement made between Ally Bank and the DOJ’s Orwellian named Consumer Financial Protection Bureau is one of many that has led to over $810 million in fines and penalties. In almost all 30 cases, the Feds ran a protection scheme against companies by accusing them of race-based lending practices. Why exactly would the banks pay the fines when the Feds are unable to provide evidence backing their allegations? Well… After paying a fine, everything goes away before charges of racism are leveled in a very public three-ring-circus of a trial. If it sounds an awful lot like a protection racket… That’s because it kinda is…

The charges facing Ally Bank? According to the Justice Department, and the CFPB, Ally Bank “charged African-American borrowers more than white borrowers in interest-rate markups not based on creditworthiness or other objective criteria related to borrower risk.”

But the allegations were somewhat dubious, given the fact that neither the DOJ, nor the CFPB, actually had access to the race, credit worthiness, or risk assessments of any of the bank’s customers. Apparently the government used “statistical analysis” based on geography and census data to determine that “racist” lending practices had occurred.

Not a single credit score was reviewed by the DOJ. Not a single borrower’s debt to income ratio was investigated. Not a single ethnicity was verified by the Feds. The $100 million fine was, instead, based off of a rather racist assumption that the borrowers in certain geographical locations were receiving higher interest loans because of their (assumed) skin color.

Welcome to Barack Obama’s “post-racial” America.

According to Eric Holder’s politically corrupt Department of Injustice, roughly 100,000 African Americans were “disparately” impacted by Ally’s lending practices. Of course this number is based off of statistical analysis, and not what a jury or judge would consider “evidence.” It’s not even clear that the authorities had any firsthand accounts of discrimination.

But why let a little thing like due process, common law, and Constitutional restraints prohibit a little extortion racket? I mean, heck, banks will pay multi-million dollar fines to keep from having a story about supposed racism plastered all over the NY Times. Making threats of negative publicity, it would seem, is more important to Holder than actually gathering proof of wrong-doing.

The theory of “disparate impact” is the theory that racist outcomes (even if they are purely the result of color blind policies, and racially neutral practices) should be punished. This, of course, means that a business that decides to treat all customers by equal and open guidelines might be in danger of facing a DOJ fine if their African American borrowers happen to have poor credit, or high debt to income ratios. The theory helped lead the mortgage industry down the road of sub-prime loans, and helped the government regulate banks into unsustainable business models… All in the name of “racial equality.” Because, obviously, “racial equality” means treating minorities by standards that differ from everyone else. (I guess Democrats have never really let go of that whole “separate but equal” mentality.)

Of course, even by the standards of “disparate impact”, the DOJ was less than justified in their fines. Pursuing millions billions in fines based off of vague statistics and racist theories is not justice. Of course, then again, we are talking about a “Justice” Department that recently found nothing wrong with the IRS’s targeting of conservative groups. This is the same “Justice” Department that ran guns to Mexico, while simultaneously pushing for increased ATF stings on American citizens. This is the same “Justice” Department that looked the other way when Black Panther members intimidated voters.

Welcome to the “hope and change” Obama promised us: A world where tax collectors hassle political dissidents, law enforcement agencies run protection schemes on successful businesses, and the needy in America are left to feed off the handouts of an increasingly bankrupt entitlement system. But, yeah… I guess Ally deserves to pay $100 million for their risk-based loan rates. That’s sure to help rebuild America’s prosperity. Right?


Michael Schaus

Michael Schaus is the Associate Editor for Townhall Finance, and the Executive Producer for Ransom Notes Radio. He is a former talk show host and political activist. Having worked in fields ranging from construction to financial investment, his perspectives and world views are forged with a deep understanding of what it means to be an American.