The CFPB has made it a goal to go after financial institutions that discriminate in lending. In fact, the agency is so focused on this goal that it doesn’t mind that its methodology for identifying discrimination in auto lending has been widely criticized and discredited as inaccurate. Instead, the agency has collected tens of millions in fines that are supposed to go to alleged “victims” of such discriminatory lending. So how is the agency supposed to pay fines to victims that probably don’t exist?
It allows penalty funds to be given to groups that work with low-income and minority borrowers–many of which are powerful left-wing activist groups that pushed for the agency’s creation in the first place.
The list of groups approved by CFPB Director Richard Cordray and Labor Secretary Tom Perez to receive cash from the CFPB’s civil penalty fund was recently obtained by Investors’ Business Daily. The eligible include groups with high-ranking Democratic allies, including The Legal Aid Society of the District of Columbia, The Mississippi Center for Justice, and the People’s Community Action Corp. of St. Louis.
As IBD points out:
The CFPB says the money will aid these and other left-wing groups in helping 45 million otherwise uncreditworthy, low-income people living in America obtain loans to buy cars and homes….So in effect the government is forcing banks to fork over payola to radical nonprofit groups that exist to shake down banks for high-risk urban home loans — the kind of mortgages that defaulted in droves during the housing crisis. The money also restocks their war chest to lobby Congress for expansion of the disastrous Community Reinvestment Act.