Tuesday, November 08, 2005
Thieves And Liars
"I wear it as a badge of honor that payday lenders and others have decided we are effective enough that they need to attack us personally." - Martin Eakes
Capital Research Center in Washington, D.C. issued a smear report last week against NC-based Self-Help Credit Union and Martin Eakes, Self-Help's CEO. Luckily for people who care about the truth, the News & Observer researched CRC's report.
CRC alleges that Self-Help has understated its loan risks and made loans to insiders. However, the News & Observer reports that state and federal regulators wholly reject those claims, calling them "very misleading." The N&O article also clarifies that Self-Help has been conservative in its quarterly reports, tending to err on the side of full disclosure. That CRC has attempted to twist some of that information reveals its true motives.
The article also notes that US Rep. Patrick McHenry of NC has been a part of the smear campaign. McHenry, who at 29 is only four years older than Self-Help, should be celebrating Self-Help as a national model for community development lending.
Self-Help has made almost $ 4 billion in loans to clients (typically women, minorities, or rural citizens) who are underserved by traditional banks. Without Self-Help providing these loans, their clients would likely have no avenue to build equity in homes and small businesses and thereby break the cycle of poverty. Self-Help does not give away money. It simply creates the opportunity for the poor to pull themselves up by their bootstraps.
Eakes recognizes that the same communities that Self-Help assists are also the targets of predatory lenders, who steal $25 billion a year with excessive fees and interest rates. Realizing that Self-Help's efforts could not be ultimately successful while predatory lenders strip away capital, Eakes helped form the Center for Responsible Lending.
CRL's successful efforts to eliminate payday lending have threatened payday lenders' ability to rip off poor people. Rather than argue the merits of each side of the payday lending issue, smear artists like CRC and Patrick McHenry have attacked Self-Help and Martin Eakes.
It is immoral to attack a person like Martin Eakes, who has given his entire adult life to providing opportunities to our society's have-nots while denying himself riches that he could easily earn. Of course, morals have no effect on the decisions of predatory lenders and their mouthpieces. It comes as no surprise to learn that payday lenders give significant financial support to CRC and McHenry.
Martin Eakes' quote above reminds us that he and Self-Help have the moral high ground on this issue. The only question now is whether politicians have the guts to eliminate the blight of predatory lending or if they will go lightweight and sell their souls like McHenry.