By Matthew R. Lee
SOUTH BRONX NY, February 6 -- Given the role of predatory lending in the financial meltdown that still haunts the global economy, the February 10 publication by Oxford University Press of a book on the topic, “The Subprime Virus” by law professors Kathleen Engel and Patricia McCoy seemed likely to counter revisionism and re-focus on the decade long fight against loan sharks.
Alas, the book makes scant mention of community or even consumer activism, much less the Community Reinvestment Act protests to banks' applications which results in some of the Federal Reserve Board's few enforcement orders and fines.
For example, the authors write about HSBC's seminal and fated acquisition of Household International without mentioning all of the community based challenges to Household and to the deal, and to HSBC afterward.
The book is like writing about the civil rights laws without mentioning how and why they were passed. It is a form of mystification.
Instead of political and social explanation, we have yet another narrative of the economic stations of the cross leading to the seizing up of global markets. At this point, such re-telling is no longer what is needed: it is like another book about the moment to moment flight plans of the 9/11/01 hijackers, and views of airport safety experts. That said, this one is told in some detail.
In the book's lengthy index, the Community Reinvestment Act is not mentioned once. Meanwhile, the “Solutions” chapter of the book has a four paragraph section entitled “Ensuring Access to Affordable Credit,” the purpose of the CRA.
Patricia McCoy has recently been appointed to the Consumer Financial Protection Bureau, from which CRA enforcement powers were stripped. If the book is an indication of awareness of, or respect for, the Community Reinvestment Act and the grassroots groups which use it, perhaps the stripping is a blessing in disguise.
The lack of focus not only on past activism that that needed in the future, including the near future, might be attributable to an inordinate faith in the Obama administration and the CFPB. But even with a President like Barack Obama, it is not law professors who are going to protect consumers and communities. Everything is politics: but “The Subprime Virus” seems to miss this.
By contrast, the 2009 book “Busted” by journalist Edmund Andrews does not purport to be an expert account. In fact, much of Edwards' story is about how he fell into foreclosure on a home he bought for his second wife and their blended family, and how that marriage fell apart. The story shoots lower, but ends of higher. We recommend it.
