So I've been trying to get a straight answer on this for a while, but it seems that one of the banks that the NAACP is suing, alleging that they knowingly steered black folks into subprime loans, has given money to the organization in the past. Wells Fargo has previously been a sponsor of the NAACP's annual convention, although the NAACP says it doesn't disclose donor amounts. The NAACP spokesman said they were also not aware of HSBC having donated in the past.
The reason I wanted to know whether the banks had donated to the NAACP is because generally, the way the hustle is supposed to work is that civil rights groups get money from companies that they then leave alone or give positive publicity to. Last year, while the country was just beginning to realize the scale of the mortgage crisis, Charles Steele Jr., head of the Southern Christian Leadership Conference, took to the Washington Post to defend subprime lending and criticized efforts at greater regulation. Well it turns out that the SCLC had formed a partnership with with CompuCredit, a subprime credit card issuer and payday lending company, which the Federal Trade Commission later sued for unfair and deceptive trade practices. They weren't the only ones with these kinds of relationships with subprime lenders, as Stephanie Mencimer reported for Mother Jones:
Three years ago, Al Sharpton went so far as to appear in TV commercials for LoanMax, a company that specializes in auto-title loans, whose 300 percent interest rates consumer advocates consider deeply predatory. CompuCredit has participated in Jesse Jackson's Rainbow/PUSH Coalition's career fairs and economic summits. Local affiliates of the National Urban League, one of the nation's oldest civil rights groups, have worked with the payday lending industry trade group, the Consumer Financial Services Association (CFSA), to conduct financial literacy seminars. Denise Harrod, CompuCredit's vice president, has served on business committees of the National Conference of Black Mayors and the National Black Caucus of State Legislators, both of which have received money from the payday lending industry.
On the one hand, black folks have historically been cut out of mainstream banks, something laws like the Community Reinvestment Act were meant to address. (The vast majority of subprime lending took place in institutions not covered by the CRA). But it's still startling to know the length that some of these groups and individuals went to defend predatory lending practices simply because these companies lent to black folks.
So there's something heartening about the NAACP and it's new president, Ben Jealous, not letting the money Wells Fargo gave dissuade them from their mission.
-- A. Serwer
