A cabal that includes the nation’s largest financial institutions, the U.S. Chamber of Commerce and some leading right-wing think tanks has succeeded in postponing congressional consideration of a consumer financial protection agency, and they are aiming to use the summer to scuttle the idea for good. (Danny Schechter today elaborates on the effort, which now counts Fed Chairman Ben Bernanke as a leader.)
They are hoping that the public will forget the malfeasance committed by some of the nation’s largest financial institutions that created today’s financial crisis, and in particular today’s mortgage foreclosure crisis.
But a new documentary that will begin debuting in August will be a reminder of the urgent need for a police officer to patrol the financial corridors where homebuyers were being, in essence, mugged by lenders.
“American Casino,” the work of Leslie and Andrew Cockburn, lays out how the mortgage market was turned into a high-stakes gambling operation, with Wall Street’s biggest players operating with the implicit encouragement of Republican lawmakers and Federal Reserve Chairman Alan Greenspan.
Cockburn, in an interview, describes the mortgage crisis as a “catastrophe of predatory lending,” noting that the primary victims were low-income people, African Americans and Hispanics. Simply put, instead of the old-fashioned “redlining”—the practice of denying certain neighborhoods loans that was common in inner-city, predominantly African-American neighborhoods through much of the 20th century—banks served up subprime loans at double-digit interest rates to people who more often than not, had they been white and living in different neighborhoods, would have qualified for more affordable prime loans.
The documentary makes clear that many of the victims of the foreclosure crisis were neither ignorant nor careless. They were victimized by loan agents who earned their money by making as many loans as possible, regardless of how bad they were, by financial giants that bundled these loans into exotic financial instruments, and by ratings agencies that were beholden to those very financial giants who in essence paid for, and expected, inflated ratings for the ultimately toxic financial brew they were selling.
Heather Booth, executive director of Americans for Financial Reform, is hoping that the documentary will be used by activists around the country to mobilize support for stronger Wall Street regulation and new consumer protections. While there have been many efforts in the past year to document how the financial collapse happened, “there hasn’t been a consistent way to tell the story” from both the viewpoint of both the Wall Street machinations and the Main Street impact. “This is the first attempt I’ve seen to tell that story,” she said.
The documentary will have its official debut in Chicago on August 14, and will then be shown in San Francisco on August 21; Milwaukee on August 28, New York City on September 2, Denver on September 11, and Los Angeles on September 18. The Cockburns are working on getting a date to show it in Washington.
This documentary can serve as an important educational grassroots tool at a time when the business lobby is throwing all of its energy into blocking reforms.
“The consumer has been left naked and vulnerable,” Cockburn says. “It’s vitally important that we have an aggressive agency with teeth” to protect consumers and hold financial institutions accountable. But in order for that to happen, we will have to organize and fight for it.