Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

36 hours left in this Mid-Year Campaign. This is our hour of need.
If you value independent journalism, please support Common Dreams.

Join the small group of generous readers who donate, keeping Common Dreams free for millions of people each year. Without your help, we won’t survive.

Treasury Secretary Steve Mnuchin is just one member of President Donald Trump's cabinet of Wall Street cronies. (Photo: IMF/flickr/cc)

What They Want to Hide Tells You Who They Are

The Treasury Department has released their report on financial regulations they want to scrap. Spoiler alert: the Wall Street sharpies who Trump put in charge of our economy, who made fortunes on both ends of the housing collapse, think pretty much all regulations on banks, including home lenders, should go.

This report was driven by Craig Phillips, who packaged and sold billions in bundled home loans for Morgan Stanley before he moved over to hedge fund giant BlackRock. His boss is former Goldman Sachs executive Steven Mnuchin, who made his bones by aggressively foreclosing on homeowners at IndyMac after the 2008 financial meltdown.

These guys think we should go a lot easier on the poor, poor megabanks, who’ve suffered enough, and toughen up the real culprits – middle-class families.

First, they want to make the financial system less safe for consumers by repealing the Volcker rule, so banks can gamble with their depositors’ money. They also want to ease up on the “stress tests” put in place after 2008 to make sure big banks don’t fail and take the whole economy down with them.

Second, they want to defang the Consumer Financial Protection Bureau (CFPB), the only agency that serves as a financial watchdog for the public, by making it basically impossible for the CFPB to either write rules or enforce them.

Third, they take us back in time. In a flashback to their earlier lives on Wall Street, Phillips and Mnuchin want to make it easier for banks to write fraudulent mortgages, then easier to foreclose on people by scrapping the qualified mortgage rules, and stop new rules on mortgage servicing from taking effect.

The Giveaway

There’s one provision stuck in this plan that may not seem like much at first glance, but it gives away their game.

Since 1975, banks have been required to report annually on their mortgages – what, where and to whom they’re making loans – under a law called the Home Mortgage Disclosure Act (HMDA).

HMDA was passed at the height of the red-lining crisis, when banks literally drew red lines on maps around low-income neighborhoods and communities of color, and refused them loans. Banks were happy to take deposits from these communities, but they were never going to offer them home financing.

The bank records and statistics the HDMA brought to light showed beyond a shadow of doubt what low-income and communities of color had been saying all along: credit discrimination was very real, with devastating effects on their families’ social and economic lives.

The analysis of HDMA data spurred the passage in 1977 of the Community Reinvestment Act, which says, very simply, that banks must make responsible loans to everyone who qualifies.

The Grand Bargain

Basically, in exchange for all the benefits government showers on banks – deposit guarantees, borrowing at the lowest possible rates and implicit guarantees against failure – banks are required not to discriminate in their lending.  And HMDA was what was made them keep up their end of the bargain.

Every year since then community groups, regulators and scholars have used HDMA data to show where discrimination happens, and force banks to make loans and meet the needs of the communities in which they operate, if they don’t.

The mortgage market has changed dramatically in the last 40 years, so as directed by Congress the CFPB is updating the HMDA reporting process so that the data collected and disseminated shows the true picture of credit availability.

When HMDA was passed, banks could get away with simply not issuing loans; since then, we have seen that toxic credit with huge fees, usurious interest rates and hidden payment time bombs are as destructive or even more than no credit at all.

We know now that in the run-up to the 2008 mortgage meltdown, toxic loans were steered to communities of color. These bad loans then led to a massive erasure of wealth in these same communities.

The Solution?

So what do Trump and his cabinet of Wall Street cronies offer as a solution?  They want to hide the evidence: the Treasury report recommends that HMDA data no longer be updated. Even more stunningly, they propose that it no longer be made public.

Just like Mitch McConnell’s backroom dealings on health care, the Republican playbook on home lending is to sweep the facts under the carpet.  They understand that what they and their corporate sponsors do cannot withstand public scrutiny.

It’s our job to continue to shine the light.


This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.

Liz Ryan Murray

Liz Ryan Murray is the policy director for People’s Action Institute.

Just a few days left in our crucial Mid-Year Campaign and we might not make it without your help.
Who funds our independent journalism? Readers like you who believe in our mission: To inform. To inspire. To ignite change for the common good. No corporate advertisers. No billionaire founder. Our non-partisan, nonprofit media model has only one source of revenue: The people who read and value this work and our mission. That's it.
And the model is simple: If everyone just gives whatever amount they can afford and think is reasonable—$3, $9, $29, or more—we can continue. If not enough do, we go dark.

All the small gifts add up to something otherwise impossible. Please join us today. Donate to Common Dreams. This is crunch time. We need you now.

Naomi Klein: The US Is in the Midst of a 'Shock-and-Awe Judicial Coup'

"The rolling judicial coup coming from this court is by no means over," warned the author of "The Shock Doctrine."

Jake Johnson ·


Markey, Bowman Join Climate Coalition in Urging SCOTUS Expansion

"We cannot sit idly by," said Markey, "as extremists on the Supreme Court eviscerate the authorities that the government has had for decades to combat climate change and reduce pollution."

Brett Wilkins ·


Ocasio-Cortez Says US 'Witnessing a Judicial Coup in Process'

"It is our duty to check the Court's gross overreach of power in violating people's inalienable rights and seizing for itself the powers of Congress and the president."

Brett Wilkins ·


Critics Say Biden Drilling Bonanza 'Won't Lower Gas Prices' But 'Will Worsen Climate Crisis'

"President Biden's massive public lands giveaway in the face of utter climate catastrophe is just the latest sign that his climate commitments are mere rhetoric," said one campaigner.

Kenny Stancil ·


'Payoff for 40 Years of Dark Money': Supreme Court Delivers for Corporate America

"It was the conservative court's larger agenda to gut the regulatory state and decimate executive powers to protect Americans' health and safety," warned one expert.

Jake Johnson ·

Common Dreams Logo