According to Paul Sperry at Investor's News Daily, Eric Holder and the Justice Department is conducting investigations and levying fines against banks that are deemed racist in their policies, based on inadequate loans to low income minorities.
Prosecutions have generated more than $20,000,000 in loan set-asides and other subsidies from banks in out-of-court settlements.
Some banks have been asked to relax their mortgage underwriting and lending standards for low income minorities, as a part of the crackdown on allegedly racist policies.
But the most interesting paragraph in the article is this one: "In several cases, the government has ordered bank defendants to post in all their branches and marketing materials a notice informing minority customers that they cannot be turned down for credit because they receive public aid, such as unemployment benefits, welfare payments or food stamps."
That suggests to me that banks are being placed in a can't-win situation; either they comply under the threat of being deemed racist, or they make bad loans, and are taken over by the FDIC when bad loans default and they become insolvent.
All in all, it's an interesting program by the Justice Department, and its long-term consequences will be just as interesting to watch.
