Benjamin

Tuesday, March 3, 2009

Swift Boating Subprime Lender into Being Honest (Pt. 3)

John Kerry’s heart bleeds for the CRL

Starkman goes on to attack and defend in forgettable style. Click here if you missed parts one or two.

“Now the Swift Boat-style campaigns against borrowers and their advocates have begun; business journalists just need to be on guard.”

Last I checked, Forbes has a distinguished history of business journalism under it’s belt. Perhaps they also have better sense than to use a political hot-button topic; it comes across as very manipulative, Dean.

But the Burger King might need them…

“90 percent of payday loans are rolled over, most of them more than five times. Why? Because someone who need a 400 percent loan is probably too strapped to pay it back… if 400-percent loans are so popular, why doesn’t Steve Forbes have one?”

Studies have shown that most payday loan customers earn very livable annual wages, and hence aren’t “too strapped” to pay them back on time. And 90 percent are rolled over and not paid back on time? Where does that data come from? The Center For Responsible Lending? You don’t say?

Regarding the Steve Forbes quip, that’s ridiculous. We all know why Mr. Forbes doesn’t need them. Neither do Tiger Woods, Bill Gates or Ronald McDonald, for that matter.

Those economists! They know nothing of finance!

Regarding Donald Morgan and Michael Strain’s Federal Reserve research paper “Payday Holiday,” Starkman dismisses the paper as “an academic work that relies on assumptions that only an economist would make.”

What’s the problem now, Mr. Starkman? An academic paper involves meticulous research. Furthermore, wouldn’t the ideas of expert economists like Morgan and Strain be pertinent to the financial issues America faces. They make it very clear that payday loans are not responsible for the problem. In fact, they show that the battle against payday loans that has been run largely by the Center For Responsible Lending has harmed consumers. Click here to go on to part four and see how Starkman concludes his attempt at journalistic impartiality. ... click here to read the rest of the article titled "Swift Boating Subprime Lender into Being Honest (Pt. 3)"

Center For Responsible Lending: Subprime/Subpar (Pt. 2)

Dean Starkman defends CRL, trips over self

But let’s look at his case against the Forbes article. It’s full of holes. Click here if you missed part one of this story.

“Payday loans, by the way, are even ranker than subprime mortgage lending, which, despite years of diligent research in sub-basement laboratories, has yet to find a way to charge the working poor 400 percent annual interest rates, as payday lenders do.

The subprime mortgage crisis has hit hundreds of thousands of families in America. It has put hundreds of thousands of people out of their homes, Mr. Starkman. Do not condescend to say that payday loans have had the same effect. It insults the intelligence of your readers. We already know that payday loans are not annual loans, so the 400 percent APR figure you bandy about is a propagandist’s toy. Self-Help, Eakes’ baby and forerunner/forefather to the Center For Responsible Lending, had everything to do with the subprime crisis and America’s economic collapse. Eakes admits this. And since studies have shown that 90 percent of payday loan customers pay on time, that 400 percent APR remains a myth. Try again, Dean.

Payday loans, Goldman Sachs… these two are NOT the same

“The financial-services industry - from the payday crews to Goldman Sachs - is rightly being blamed for breathtaking corruption that led to the cratering of the U.S. economy and global credit markets.”

Based upon your career history previous to this article, I would conclude that you make a habit of such ridiculous comparisons. But there it is. You are placing payday lenders and Goldman Sachs in the same boat. And of course, you neglect to mention Self-Help, Herbert Sandler or Marvin Eakes‘ role in the subprime meltdown. Payday loans don’t come anywhere close to that kind of damage, they are government-regulated and they inform customers of all fees up front. No surprises. Click here for more of Starkman’s self-satisfied but errant analysis. ... click here to read the rest of the article titled "Center For Responsible Lending: Subprime/Subpar (Pt. 2)"

Defending Subprime Lenders? Bad Premise! (Part One)

Starkman’s got the Center For Responsible Lending on his mind

Award-winning journalist Dean Starkman should have known better. His journalistic career has been one of distinction. He was worked for high-profile publications like the Washington Post and the Wall Street Journal. He was even part of an investigative team that won a Pulitzer Prize. But in a 2008 article for the Columbia Journalism Review entitled “Eakes!“, Starkman has written something that quickly (and conveniently) appeared on the self-defense page on the Center For Responsible Lending’s Web site. While I certainly h ave no evidence of payola here, it raises the question at the very least. I would hope that was not the case, however. People distrust journalists enough as it is.

Starkman presents “Eakes!” as an attack upon an article that ran a mere two days before in Forbes, “Subprime’s Mr. Clean.” The Forbes article refers to Martin Eakes, the founder of Self-Help, Inc. and president of the Center For Responsible Lending (CRL). Essentially, Starkman takes issue with the probe of what he calls a “prescient consumer advocate” in the field of subprime lending. Today, Eakes and the Center For Responsible Lending speaks out against subprime lending, but yesterday, their hands were planted firmly in the pie. Starkman is only aware of what the CRL is doing today, it seems - hurling unfair criticism at pay day loans. That much is clear, because he spends almost all of his time spreading anti-payday loan propaganda instead of dealing with the smoking gun that truly puts the poor face on the CRL. ... click here to read the rest of the article titled "Defending Subprime Lenders? Bad Premise! (Part One)"

Defending Subprime Lenders? Bad Premise! (Part One)

Starkman’s got the Center For Responsible Lending on his mind

Monday, March 2, 2009

ACORN & Center For Responsible Lending: Subprime Culprits

Sharks that feed on banks

During the recent presidential election, an organization called the Association of Community Organizers for Reform Now (ACORN) grabbed more than its share of the headlines. Specifically, there have been allegations that ACORN has been involved in large-scale voter fraud (and here’s a road map). But let’s focus on some of their even more prominent activities, and how they have had close ties with Self-Help Credit Union and the Center For Responsible Lending (CRL). It could easily be said that ACORN and the CRL have sided against the American taxpayer since day one.

For those of you who don’t know, ACORN is a consumer group that began after the Community Reinvestment Act (CRA) became official in 1977. Their stated goal since the beginning has been to combat redlining. However, what they have achieved over the years is to effectively convince lenders to relax their standards so that they can serve people with poor credit and little or no assets. According to the Wall Street Journal, ACORN and the CRA “laid the foundation for the house of cards built out of subprime loans.& #8221; ... click here to read the rest of the article titled "ACORN & Center For Responsible Lending: Subprime Culprits"

Obama Proposes Cutting Tax Breaks for Itemized Deductions

Some worry move would hurt charities

President Barack Obama has made several bold proposals in his budget plans. His biggest project is a plan to put $634 billion toward health care reform. It’s a spendy project, and it’s Obama’s job to figure out how to fund it.

Among his budget proposals, he has suggested limiting tax breaks for itemized deductions. That would only apply to families that make more than $250,000 per year or more.

Will people be less charitable?

Itemized deductions include tax breaks for charitable giving. Critics worry that if tax deductions are capped for wealthy people, they won’t donate as much to charity. The majority of donations to charitable causes come from the same income bracket that would experience the decreased tax breaks.

Obama’s proposal

The 2010 budget proposal that Obama has laid out calls for a 28 percent limit on the value of the tax break for itemized deductions. So, for every dollar donated to charity, people who make more than $250,000 would save 28 cents on their taxes.

Currently, the rate people save on itemized deductions is about 20 percent higher than the proposed cap. So the wealthiest people can save 48 percent on itemized deductions.

Bringing in big money

The cap on itemized deductions would raise $318 billion. That would get the president about halfway to his $634 billion health care goal, which is aimed at making health care more affordable and available to everyone in the United States.

The itemized deduction cap would also apply to deductions for mortgage interest.

Charities worry about funding

Independent Sector, a coalition of charities and foundations, and the Council on Foundations have said they are worried that they will get less funding as a result of the limit on tax breaks. A study from Indiana University says it’s possible that billion of dollars in charitable giving are at stake. Others say the effects of the change could be limited as far as charity donations go. ... click here to read the rest of the article titled "Obama Proposes Cutting Tax Breaks for Itemized Deductions"

Sunday, March 1, 2009

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