"Community Organizers" Sue Firms for Following Their Advice

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Why'd You Listen to Us?
"An association of community-based organizations has filed a federal civil rights complaint against two of the three largest Wall Street rating firms, charging that their inflated ratings on subprime mortgage bonds disproportionately caused financial harm to African American and Latino home buyers across the country," the Los Angeles Times reports:

The complaint, filed by the National Community Reinvestment Coalition, alleges that Moody's Investors Service and Fitch Ratings enriched themselves by assigning high ratings to bonds backed by mortgages "that were designed to fail" because of "unfair payment terms and insufficient borrower income levels."
The firms "knew or should have known" that subprime loans disproportionately were marketed to minority consumers--a process known as "reverse redlining"--and that those borrowers would ultimately default and go into foreclosure at high rates, according to the coalition's complaint.

As Mickey Kaus points out (fourth item), it was groups like the plaintiffs that pressured banks to make imprudent loans to minorities in the first place. It reminds us of that joke about the definition of chutzpah: Guy murders his parents, than pleads with the bank not to foreclose on their house saying he forgot to pay the mortgage because he was so upset over being an orphan.

Whats particularly interesting about this is that it proves what conservatives have been saying about the sub-prime crisis all along: it was the lending practices that resulted from the Community Redevelopment Act and government policies that forced banks to lower lending standards that are at the root of the worldwide financial panic. The Left is admitting it was not "deregulation" but specific government "regulation" that is the cause of the mess we are in.