Minority Congressional Group Holds Town Hall Meeting On Economy

The Town Hall meeting was part of the CBCF's Annual Leadership Conference taking place this week in the nations capitol. A large audience attended the session that was opened by this years Co-Chair Representative Gregory Meeks (D-NY) of New York City. The mortgage crisis is of particular interest to minorities because the disproportionate impact on Black and other minority homeowners affected by the crisis. Much of the discussion during the Town Hall Meeting centered on the need for relief for homeowners who have been directly impacted by the mortgage crisis. On stage for the first panel were Rep. Maxine Waters (D-CA), Kenneth Wade, CEO of Neighborhood Works America; Lee Bowman, National Coordinator for Community Affairs with the Federal Deposit Insurance Corporation (FDIC); Rep. Sheila Jackson Lee (D-TX); Eric Eve, Vice President, Global Community Relations for Citi Bank; Lawrence Parks, Senior Vice President for External and Legislative Affairs for the Federal Reserve Bank; Stacey Tisdale, journalist and author; and Mary Lee Widener, President and CEO of Neighborhood Housing Services of America (NHSA). Also joining the panel was Franklin D. Raines, Vice Chairman of the Board of Revolution Health Group LLC and former chairman and CEO of Fannie Mae. Raines has come under scrutiny from the McCain/Palin campaign for his role in the collapse of Fannie Mae and his tenuous ties to Barack Obama. Fannie Mae made financial contributions to many members of the Congress on both sides of the aisle, including both presidential candidates. Raines, who was Office of Management and Budget (OMB) director during the Clinton administration, suggested that one remedy that should be included in any bailout plan is a provision to provide a direct grant of $10,000 from not-for-profit organizations to individuals facing foreclosure. Making a brief appearance the panel was Representative Barney Frank (D-MA), who heads the Financial Services Committee in the House of Representatives, stopped by en route to a meeting at the White House in order to provide an update on negotiations over President Bush’s $700 billion bailout proposal. Frank made clear that Democrats on the Hill were working to insure that there were provisions in the bill being proposed by the White House and took a swipe at Republican presidential nominee Senator John McCain for “politicizing” the financial crisis. Congresswoman Waters addressed the panel before heading back to Capitol Hill to Chair a Congressional Banking Committee hearing while Frank was attending the highly publicized, but ultimately unfruitful White House Meeting, that included House and Senate leadership as well as the Presidential candidates. The California Congresswoman acknowledged that race was a factor in the fallout in the mortgage market stating:

“There is a little blame to go around for everybody. African Americans and whites with the same incomes and credit histories approached financial institutions, and the sub-prime mortgage is the one that was extended to African Americans; the one that is 1, 2, or 3 points higher than prime. We had brokers on the street who look like us, who took these toxic products and sold them to our people."

Waters took note that 40 percent of all mortgages in East Cleveland are in foreclosure, with most of the foreclosed homeowners being African American. Representative Sheila Jackson-Lee (D-TX) alluded to the current negotiations with the White House and her belief that the legislation should include protections and options for homeowners in foreclosure. Jackson remarked:

“One of the holding points in the negotiation is the need to have a provision to allow homeowners to go into bankruptcy court, declare bankruptcy, and have the bankruptcy courts reorganize finances to save their homes.”

A point that many of the panelists made was that the burden should not be on the homeowner, no matter if poor choices were made when the mortgage was executed. Still, Eric Eve of Citi Bank reminded the audience that banks have no interest in seizing homes and having the properties in their inventory. He stressed that homeowners facing foreclosure must be proactive in trying to secure support from the proposed bailout. Eve suggested:

“You have to come to me, Citibank or Bank of America, or whatever. You have to hold us accountable. You have to ask what’s in this for me.”

Journalist and author Stacey Tisdale, who regularly reports on business issues for several media outlets, took a different tact when reflecting on issues of accountability for consumers and the role of public education on personal finance. Tisdale was adamant that education efforts on personal finance must start early in order to avoid a recurrence of the current economic meltdown the nation is currently experiencing. She argued:

“One of the biggest influences on our (Americans) behavior is how we saw money handled as we were growing up. We do not teach basic money management in schools and that should be against the law.”

In a lighter moment Marc Morial raised the possibility that the financial meltdown may not be what the President has been describing and compared it to the lack of transparency in the run up to the Iraq War, calling the plan the financial equivalent to weapons of mass destruction. Morial warned that the true extent of the crisis was unknown because the White House has yet to divulge a real analysis of the economy. The former New Orleans mayor expressed his concern that by quickly passing the President’s bailout proposal, the next administration might be saddled with a commitment that is either insufficient to meet the scope of the problem or based upon erroneous data. Hopefully the Congress will realize that in trying to get things done quickly, it often gets done wrong. His remarks may eventually ring prophetic on a day in which Democratic and Republican leaders in Congress went to the White House to meet with President Bush and his advisers to negotiate the bailout proposal, but alas came away with no agreement at all.