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I f someone told you that a bunch of low-income people, most of them African-American or Latino, most of them women, most of them elderly, had been victimized by a predatory mortgage lender that stripped them of much of their equity or of their entire homes, you might not be surprised. But if I told you that these women and men had gotten together and, after three years of work, brought the nation’s largest high-cost lender to its knees, forced it to sell out to a foreign company, and won back a half a billion dollars of what had been taken from them—one of the largest consumer settlements ever—you’d probably ask me what country this had happened in. Surely it couldn’t have been in the United States of the Second Gilded Age, the land of unbridled corporate power and radical government activism on behalf of the rich and the greedy.
it was. These victims identified a problem and named it “predatory
lending” in the late 1990s. Their campaign to reform Household
International (also known as Household Finance and as Beneficial)
played out from 2001 to 2003, concluding with a settlement that
includes a ban on badmouthing the company. That’s why more
people haven’t heard about this. The families who fought back
and defeated Household are barred from bragging about it or teaching
the lessons they learned, because that would require recounting
the damage that Household did to homes and neighborhoods. These
families are members of ACORN, the Association of Community Organizations
for Reform Now.
I was ACORN’s communications coordinator during much of the Household campaign, but left before it ended. No one has asked me not to tell this story.
In low-income minority neighborhoods in the United States, what little wealth there is, is in home equity. Home equity makes up 74.9 percent of the net wealth for Hispanics in the bottom two income quintiles (0-40 percent) and 78.7 percent of the net wealth for African Americans in the second income quintile (20-40 percent). There have been gains in minority home ownership over the past few decades, in part as a result of the work by community groups like ACORN and National People’s Action to force banks to make loans in these communities, but the home ownership is fragile and not protected by additional savings. Lenders in the past decade have focused on stripping away equity and community groups have been forced to focus on keeping out loans that are worse than no loans at all.
Most high-cost loans are refinance loans. Too often they are marketed aggressively and deceptively, including through live- checks in the mail that result in very high-cost loans that the lender will be only too happy to refinance into a new mortgage. Often these loans are made with excessive, sometimes variable, interest rates, outrageously high fees, and fees financed into the loans so that the borrower pays interest on them and often is not told about them. They are made with bogus products built in, on which the borrower also pays interest. Hidden balloon payments force repeated refinancings for additional fees each time. Mandatory arbitration clauses attempt to prevent borrowers from taking lenders to court. The practice of loaning more than the value of a home traps borrowers in loans they cannot refinance with a responsible lender. Consolidation of additional debts further decreases equity, placing the home at greater risk. Quiet omission of taxes and insurance from a mortgage that previously included those charges results in a crisis when yearly bills arrive.
Predatory lenders turn the usual logic of lending upside down. They make their money by intentionally making loans that the borrowers will be unable to repay. They charge fees for each refinancing until finally seizing the house. Fannie Mae has estimated that as many as half of all borrowers in subprime (high-cost) loans could have qualified for a lower cost mortgage.
High-cost loans are not just made to people with poor credit. They’re often made to people who have poor banking services in their neighborhoods.
ACORN members don’t take abuse of their neighborhoods lying down, and Household was a leading cause of the rows of vacant houses appearing in ACORN neighborhoods in the 1990s. ACORN launched a campaign to reform Household that included numerous strategies. One, an ACORN stand-by, was direct action. Repeatedly, ACORN members in numerous cities around the country simultaneously protested in Household offices to demand reform. At the same time, ACORN was working to pass anti-predatory lending legislation in local and state governments and Congress. ACORN members made sure that in each case the victims testifying were victims of Household and that Household’s abuses were highlighted. When ACORN released major reports on predatory lending, the examples included were always from Household.
ACORN also worked with the Coalition for Responsible Wealth to advance a shareholder resolution that would have tied Household’s executives’ compensation to ending its predatory lending. In 2001 Household held its shareholders meeting in an out-of-the-way suburb of Tampa, Florida. A crowd of ACORN members was there with shark suits and shark balloons to protest.
The resolution won 5 percent. Over the next year, ACORN pressured state pension funds and other shareholders. Household held its 2002 meeting an hour and a half from the nearest airport in rural Kentucky. Members made the trip by car from all over the country. The protest may have been the biggest thing the town of London, Kentucky had seen in years. The resolution won 30 percent.
As a result, various local and state governments threatened to divest from Household. ACORN also put pressure on stores like Best Buy that used Household credit cards. At the same time, ACORN Housing Corporation was assisting many Household victims in either refinancing out of their Household loans or at least canceling some of the rip-off services built into their loans, such as credit insurance. ACORN was also getting the word out to stay away from Household.
ACORN wrote up numerous accounts of Household predatory loans and took them to the attorney generals in state after state urging investigations. ACORN similarly pressured federal regulators to act. ACORN assisted borrowers in filing a number of class-action suits against Household targeting those of its practices that were clearly illegal even under existing law. They let Wall Street analysts know what Household stood to lose from these lawsuits, as well as from various reforms that Household periodically announced in its attempt to hold off the pressure.
But ACORN members never let up. They protested again and again at Household offices and held press conferences in front of homes about to be lost to Household. They protested the secondary market that was putting up capital for these predatory loans and they held a major protest at the trade group that lobbied in Washington for Household and its fellow sharks. Then, in the summer of 2002, in the wealthy suburbs north of Chicago, victims of Household from around the country poured out of busses by the thousands onto the lawns of the board members and the CEO of Household. They knocked on doors and spoke to those who had hurt them from a distance. When the police made them leave, ACORN members plastered “Wanted” posters all over the neighborhood telling the board members’ neighbors what crimes the Household executives were guilty of.
Through all of this, we worked the media. I kept a database of victims’ stories and contact information and put them in touch with reporters whenever the reporters were willing to tell not just the victimization story but also the story of fighting back. We generated several hundred print articles and several hundred TV and radio stories about Household’s predatory lending practices. We worked the small neighborhood papers, flyers in churches, posters on walls. We provoked lengthy articles in the New York Times, Washington Post, Wall Street Journal, Los Angeles Times , and Forbes Magazine . We kept up an endless barrage in the trade press: the American Banker, National Mortgage News, etc.
A handful of ACORN staff people with great expertise and unrelenting effort organized thousands of members to drive this campaign until Household agreed to pay victims $489 million through the 50 states attorneys general, and later agreed to pay millions more through ACORN, as well as to reform its practices.
This campaign was an example of what can be done if enough different angles are pursued at once and the company ripping you off is put on the defensive and constantly hit with the unexpected. This campaign increased the size and power of ACORN to effect future progressive change. This is good news for low-income neighborhoods, but bad news for Wells Fargo, the predatory lender who is next on ACORN’s list.
David Swanson is a board member of the Progressive Democrats of America. The views expressed are his alone. This article first appeared in The Wealth Inequality Reader by Dollars and Sense and United for a Fair Economy.
Z Magazine Archive
AnnouncementsLABOR - May 1 is May Day. Workers of the world will celebrate the 124th anniversary of International Worker’s Day. Born out of a call for an 8-hour workday in the United States, this day is an opportunity for all workers to show their solidarity with one another, as well as to renew the call for labor rights.
FARM CONFERENCE - The Farm Conference on Community and Sustainability will be held May 24-26 in Summertown, TN, in partnership with the Fellowship of Intentional Communities. Tour green homes, see sustainable food production, learn about solar installations, alternative education, midwifery, and more.
Contact: Douglas@thefarmcommunity.com; http://www.thefarmcommunity.com/.
PALESTINE - The Conference of the Palestinian Shatat in North American will be held June 3-5 in Vancouver. The conference will examine the future of the Palestinian liberation movement.
Contact: firstname.lastname@example.org; http://www.palestinianconference.org/.
LABOR - The Pacific Northwest Labor History Association’s 45th annual conference will be held May 3-5, in Portland, OR. This year’s theme is Labor Under Attack: Learning from the Past and Preparing for the Future. A call for presentations, workshops and papers is currently underway.
Contact: PNLHA, 27920 68th Ave. East, Graham, WA 98338; 206-406-2604; PNLHA1@aol.com; http://www3.telus.net.
MARIJUANA - On the first Saturday of May marijuana legalization activists will hold informational and educational events, rallies and marches in over 300 cities around the world.
ECONOMICS - The Union For Radical Political Economics will hold its 39th annual conference May 9-11 in New York City.
RECLAIM THE DREAM - The 2013 Poor People’s Campaign & March from Baltimore to Washington D.C. will be May 11. Communities, schools and unions interested in participating are encouraged to contact the Baltimore People’s Assembly.
Contact: 410-500-2168; 410-218-4835; BaltimorePeoplesAssembly@gmail.com; Southern Christian Leadership Conference of Baltimore and the Baltimore Peoples Power Assembly, 2011 N. Charles St., Baltimore, MD 21218.
MOTHER’S DAY - The 17th Annual Mother’s Day Walk For Peace will be May 12th, in Dorchester, MA. The walk began in 1996 for families who had lost children to violence. The day has become a way for thousands of people to financially support the work of the Louis Brown Peace Institute.
Contact: http://www.ldbpeaceinstitute.org/; http://mothersdaywalk4peace.org/.
NATO 5 - An International Week of Solidarity with the NATO 5 has been called for May 16-21. Supports call on supporters to raise awareness of the NATO 5 and support funds for the defendants on the one-year anniversary of their preemptive arrests.
Contact: email@example.com; https://nato5support.wordpress.com.
MOUNTAINTOP - The 2013 Mountain Justice Summer Activist Training Camp will be held May 19-27 in Damascus, VA. It will be a week of workshops, field trips to view Mountain Top Removal coal mines, direct actions, and service project.
FEMINIST SCI-FI - The feminist science fiction convention WisCon 37 is scheduled for May 24-27 in Madison, WI.
Contact: WisCon, ? SF3, PO Box 1624, Madison, WI 53701; firstname.lastname@example.org; http://www.wiscon.info/.
ANARCHY FEST - A month-long Festival of Anarchy is scheduled for May in Montreal. The festival includes The Montreal Anarchist Bookfair (May 19-20).
Contact: http://www.anarchistbookfair.ca/; http://www.radicalmontreal.com/.
LABOR - The International Labor Rights Forum will present: Down the Supply Chain, Driving Corporate Accountability, on May 22 in Washington, DC. The Labor Rights Awards Ceremony and Reception will honor pioneers in supply chain worker organizing, working solidarity and international labor rights policy.
MULTICULTURE - The 26th annual National Conference on Race & Ethnicity in American Higher Education (NCORE) will take place May 28-June 1, in New Orleans.
Contact: SWCHRS, 3200 Marshall Avenue, Suite 290, Norman, OK 73072; 405-325-3694; email@example.com; www.ncore.ou.edu.
MEDIA - The 2013 Alliance for Community Media Annual Conference will be held May 29-31, in San Francisco, CA. Participants will include educators, community leaders, media professionals, journalists, nonprofit leaders, policymakers and students.
RADIO - The 38th Annual Community Radio Conference is schedule for May 29-June 1, in San Francisco, CA, with discussions and workshops.
Contact: 1101 Pennsylvania Ave. NW, Suite 600, Washington, DC 20004; 202-756-2268; firstname.lastname@example.org; http://www.nfcb.org/.
BRADLEY MANNING - On June 1, a rally will be held at Fort Meade in support of Bradley Manning.
BIKES - Bikes Not Bombs is holding its 24th annual Bike-A-Thon and Green Roots Festival in Boston, MA on June 3, with several bike rides scheduled, music, exhibitors and more.
Contact: Bikes Not Bombs, 284 Amory St., Jamaica Plain, MA 02130; 617-522-0222; email@example.com; www.bikesnotbombs.org.
LEFT FORUM - The 2013 Left Forum will be held June 7-9, at Pace University in New York City.
Contact: 365 Fifth Avenue, CUNY Graduated Center, ? Sociology Dept., New York, NY 10016; http://www.leftforum.org/.
VEGAN FEST - Mad City Vegan Fest will be held in Madison, WI, June 8. The annual event features food, speakers, and exhibitors.
Contact: 122 State Street, Suite 405 B, Madison, WI 53701; firstname.lastname@example.org; http://veganfest.org/.
ADC CONFERENCE - The American-Arab Anti-Discrimination Committee (ADC) holds its annual conference June 13-16, in Washington, DC, with panel discussions and workshops on civil rights, media and other topics.
Contact: 1990 M Street, Suite 610, Washington, DC, 20036; 202-244-2990; email@example.com http://convention.adc.org/.
CUBA/SOCIALISM - A Cuban-North American Dialog on Socialist Renewal and Global Capitalist Crisis will be held in Havana, Cuba, June 16-30. There will be a 5 day Seminar at University of Havana, plus visits to a cooperative, urban garden, community development project, social research centers, and educational & medical institutions.
Contact: firstname.lastname@example.org; http://www.globaljusticecenter.org/.
NETROOTS - The 8th Annual Netroots Nation conference will take place June 20-23 in San Jose, CA. The event features panels, trainings, networking, screenings, and keynotes.
Contact: 164 Robles Way, #276, Vallejo, CA 94591; email@example.com; http://www.netrootsnation.org/.
MEDIA - The 15th annual Allied Media Conference will be held June 20-23, in Detroit.
Contact: 4126 Third Street, Detroit, MI 48201; http://alliedmedia.org/.
GRASSROOTS - The United We Stand Festival will be hosted by Free & Equal, June 22 in Little Rock, Arkansas. The festival aims to reform the electoral process throughout the U.S.
SOCIALISM - The Socialism 2013 Conference is scheduled for June 27-30 in Chicago, featuring talks and panel discussions.
Contact: firstname.lastname@example.org; http://www.socialismconference.org.
LITERACY - The National Association for Media Literacy Education (NAMLE) will hold its conference July 12-13 in Los Angeles under the heading, Intersections: Teaching and Learning Across Media.
Contact: 10 Laurel Hill Drive, Cherry Hill, NJ 08003; http://namle.net/conference/.
IWW - The North American Work People’s College will take place July 12-16 at Mesaba Co-op Park in northern Minnesota. The event will bring together Wobblies from branches across the continent to learn new skills and build One Big Union.
PEACESTOCK - On July 13th, the 11th Annual Peacestock: A Gathering for Peace, will take place at Windbeam Farm in Hager City, WI. The event is a mixture of music, speakers and community for peace. Sponsored by Veterans for Peace.
Contact: Bill Habedank, 1913 Grandview Ave., Red Wing, MN 55066; 651-388-7733; email@example.com; http://www.peacestockvfp.org.
CHILDREN’S DEFENSE - July 15-19, join clergy, seminarians, Christian educators, young adult leaders and other faith-based advocates for children at CDF Haley Farm in Clinton, Tennessee, for five days of spiritual renewal, networking, movement building workshops, and continuing education about the urgent needs of children at the 19th annual Proctor Institute for Child Advocacy Ministry.
Contact: firstname.lastname@example.org; http://www.childrensdefense.org.
ACTIVIST CAMP - Youth Empowered Action (YEA) Camp will have sessions in July and August in Ben Lomond, CA; Portland, OR; Charlton, MA. YEA Camp is designed for activists 12-17 years old who want to make a difference in the world.
Contact: email@example.com; http://yeacamp.org/.
LA RAZA - The annual National Council of La Raza (NCLR) Conference is scheduled for July 18-19 in New Orleans, with workshops, presentations and panel discussions.
Contact: NCLR Headquarters Office, Raul Yzaguirre Building, 1126 16th Street, NW, Washington, DC 20036; 202-785-1670; www.nclr.org.
LABOR - The Eastern Conference For Workplace Democracy: Growing Our Cooperatives, Growing Our Communities, will be held at Drexel University in Philadelphia, PA, July 26-28.
Contact: firstname.lastname@example.org; http://east.usworker.coop/.
WOMEN/LYNNE STEWART- Radical Women is asking for support letters and cards to be sent to Lynne Stewart. Stewart is a civil rights attorney and political prisoner who is currently in jail. She has breast cancer and authorities have denied her request for transfer from her Texas prison to the New York City hospital where she received medical attention during a prior bout of breast cancer. Send messages and cards to: Lynne Stewart 53504-054, Federal Medical Center Carswell, P.O. Box 27137, Fort Worth, TX 76127.
Contact: 747 Polk Street, San Francisco, CA 94109; 415-864-1278; RadicalWomenUS@gmail.com; http://lynnestewart.org/; http://www.radicalwomen.org/.
HAITI/WOMEN - Haiti’s government is considering a legal reform measure that would prohibit and punish all sexual assault, including marital rape. MADRE and the International Campaign to Stop Rape & Gender Violence in Conflict are launching a petition to raise international support for this push to address violence against women in Haiti.
Contact: 121 West 27th Street, #301, New York, NY 10001; 212-627-0444; email@example.com; http://www.madre.org.
SYRIA/MIDDLE EAST - The Middle East Children’s Alliance (MECA) is currently seeking funds to assist more than 200,000 refugees fleeing violence in Syria.
FOLK FESTIVAL - The Falcon Ridge Folk Festival will be held August 2-4, in the Berkshires, NY.
Contact: http://www.falconridgefolk.com/; firstname.lastname@example.org.
WAR RESISTERS - The War Resisters League will hold its 90th anniversary conference, Revolutionary Nonviolence: Building Bridges Across Generations and Communities, August 1-4, at Georgetown University. The event will focus on the U.S.’ long history of antimilitarism.
Contact: 339 Lafayette Street, New York, NY 10012; 212-228-0450; email@example.com; http://www.warresisters.org.
POPULAR ECONOMICS - The Center for Popular Economics is holding its 2013 Summer Institute August 4-9 at Hampshire College in Amherst, MA. No background in economics is needed for this intensive training. This year’s theme is, The Care Economy: Building a Just Economy with a Heart.
Contact: Center for Popular Economics, PO Box 785 Amherst, MA 01004; 413-545-0743; firstname.lastname@example.org; www.populareconomics.org.
VETERANS - Veterans for Peace is holding the 28th annual convention August 6-11 in Madison, WI. This year’s theme is, Power To The Peaceful.
DEMOCRACY - The Democracy Convention will take place August 7-11 in Madison, WI. The convention brings together nine conferences including topics such as media, education, defense, race, environment and others.
MEN - The 38th National Conference on Men & Masculinity: Forging Justice: Creating Safe, Equal and Accountable Communities, presented in partnership with HAVEN, will be held in Detroit, MI, August 8-10.
Contact: email@example.com; http://www.nomas.org/.
OCCUPY - An Occupy National Gathering will be held in Kalamazoo, MI, August 21-25.
Contact: firstname.lastname@example.org; http://occupynationalgathering.net/.
COMMUNITIES - The Communities Conference is a networking and learning opportunity for co-operative or communal lifestyles, with workshops, events and entertainment; scheduled for August 30-September 2 at the Twin Oaks Community in Louisa, Virginia.
LABOR DAY - The 29th annual Bread and Roses Festival, a celebration of the ethnic diversity and labor history of Lawrence, MA, will be held September 2, in honor of the 1912 Bread and Roses Strike. There will be music, dance, poetry, drama, ethnic food, historical demonstrations, walking & trolley tours.
Contact: PO Box 1137, Lawrence, MA 01842; 978-794-1655; http://www.breadandrosesheritage.org/.
OCCUPY WALL STREET - September 17 is the two-year anniversary of the Occupy Wall Street movement. Events are planned in New York City and worldwide.
TEACHERS - The 13th Annual Conference, “Teaching for Social Justice: The Politics of Pedagogy,” will be held October 12 in San Francisco, CA. The free event features workshops, resources, and free childcare.
Contact: 415-676-7844; email@example.com; http://www.t4sj.org/.
HAITI - International Action, which brings clean water and chlorinators to Haiti, seeks office space capable of housing up to six people and their office equipment.
Contact: Zach Bremer, Zbrehmer@haitiwater.org; 202-488-0735; http://www.haitiwater.org/.
MEDIA - The Union for Democratic Communications and Project Censored are sponsoring a joint conference on media democracy, media activism and social justice to be held November 1-3 at the University of San Francisco. Proposals for presentations, workshops and panels from activists and critical scholars are invited.