By David Swanson
The McCain-Palin campaign is running an advertisement “accusing ” Barack Obama of once training ACORN members in Chicago. Obama should be proud of that. I’ve done it myself and am proud of it. I trained Chicago ACORN members in how to talk to the media about the wonderful work they do.
What sort of work? Chicago ACORN has worked to improve local schools, reducing class sizes, providing teachers with mentors and assistants. Chicago ACORN has worked to prevent predatory lending and reform predatory lending corporations, the opposite of what ACORN is accused of in the right-wing myth that blames Wall Street’s troubles on Wall Street’s victims. Chicago ACORN and its partner, Service Employees International Union Local 880, have worked to raise wages and working conditions for everyone — yes, including all immigrants; there’s no other way to do it. And ACORN has done work we should all appreciate in registering citizens to vote.
Here’s something I wrote about Chicago ACORN five years ago that gives an idea of the creative and successful work they were engaged in:
Turning Up the Heat on Bush
January 9, 2003
By David Swanson, Democratic Underground
Yesterday afternoon three elderly women out of a group of 50 protesters were arrested in Illinois Republican Party headquarters in Chicago where they had settled in with blankets and declared that they were spending the night. These families, many without heat in their homes, were demanding that President Bush release money for energy assistance and not slash funding for the Low Income Home Energy Assistance Program (LIHEAP) this year. At least the jail had heat.
Bush is speaking in Chicago today about how he can pretend to try to stimulate the economy without doing the only thing that might work, namely putting money in the hands of people who need it. Bush believes that those who work for a living should go on being taxed, but that money gained from investments in the stock market should not be taxed. And why not? Surely there’s nothing useful our government could do with $600 billion. I guess no one would be pleased if this money were used, for example, to create good public schools?
This president has an amazing power to make people feel physically ill by the sheer force of his cynical cruelty. But some people are ill for a less intellectual reason: they have no heat.
Mahaley Somerville, 81; Gwendolyn Stewart, 68; Beatrice Jackson, 53; and Virginia Goldman, 27, were arrested for trespassing at 32 W. Randolph, 17th floor, the offices of the Illinois and Cook County Republican Party yesterday when they went to call on President Bush to rescind his proposed cuts in federal energy assistance.
“I’m 81 years old, and these old bones would be more comfortable in my own bed tonight,” said Mahaley Somerville, longtime leader of the community group ACORN and organizer in Chicago’s Westside Lawndale community. “But as long as there are other senior citizens living without heat tonight, we will not stop until the President hears us.”
Because President Bush will make his national speech on the economy in Chicago today, ACORN members called on him to add two things to his speech: Release the $500 million in emergency energy assistance funds that are at his disposal; Fund the Low Income Home Energy Program (LIHEAP) at the same level as last year: $1.7 billion (instead of the $1.4 billion or less that Bush has threatened).
“It’s too bad when the Republicans have to put senior citizens in jail and leave other seniors without heat,” said Beatrice Jackson, president of Illinois ACORN. “But we won’t stop until Bush understands that a leader should not let his people freeze.”
More than 50 members of ACORN joined in the sit-in at Republican headquarters on Monday afternoon. The security guard in the lobby stood with his arms out as everyone trooped in, got in elevators, and headed to the 17th floor. The ACORN members went in, put down their blankets and pillows, and announced they were spending the night.
The leaders, Mrs. Somerville, Gwen Stewart and Bea Jackson, made statements. “We’re willing to go to jail if that’s what it takes to win heating assistance for seniors and children and families who are freezing,” they said.
Doris Rodgers spoke. She is 81, has been without heat for two years, and still owes $2,400 on her bill, though the gas company confirmed today that she had been paying every month.
The police arrived and arrested four ACORN leaders on charges of misdemeanor trespassing.
While the 50 ACORN members were in the Republican Party headquarters, the phone rang, and an ACORN member answered it “ACORN, Can I help you?”
On the other end, they said, “What, ACORN? Wait a minute, this is the Republican Party in D.C. calling the Republican Party in Illinois.”
The ACORN member said, “ACORN has taken over the Republican Party in Illinois. Can I help you?”
The response: “Oh my God.”
But the heart and soul of the Republican party will not be taken over so easily by decency or kindness.
A cold winter and high fuel prices mean hard times for working families who struggle to keep their heat on. Home heating oil prices in the Northeast are expected to increase by 42% from last winter. Propane in the Midwest is predicted to increase by 21% and natural gas prices in the Midwest are predicted to increase by 17% over last winter’s bills. Reports from around the country show that the number of households being disconnected are on the rise.
The Low Income Home Energy Assistance Program (LIHEAP) is a federal block grant program that provides money to help low-income families heat and cool their homes. LIHEAP is essential for protecting the health and safety of low-income children, seniors, and persons with disabilities.
For low-income people, whose incomes are often fixed, the increased cost of energy is a huge burden and getting heavier. In FY 2001, when LIHEAP received a total of $2.25 billion (regular plus emergency funds), states were only able to serve 17% of eligible households. The current economic downturn further exacerbates LIHEAP funding shortfalls. Unemployment is on the rise, the U.S. poverty rate increased last year for the first time in eight years, and household income declined in 2001 after remaining flat a year earlier.
The demand for LIHEAP is on the rise. President Bush has $500 million dollars in emergency LIHEAP funds at his disposal but refuses to release it. $200 million of these funds are leftover from the $300 million Congress appropriated for energy emergencies in FY 2002. $300 million of it has been approved by the Senate and requested by Bush himself for this fiscal year. President Bush has the sole authority to release these funds to low-income consumers.
FY 2003 appropriations must be finalized by Congress in January, and LIHEAP advocates are urging Congress to provide funding at no less than $1.7 billion, plus the $300 million in emergency appropriations. The President has proposed cutting funding to $1.4 billion (plus $300 million in emergency funds) for FY 2003. In FY 2002, Congress appropriated $1.7 billion (plus $300 million in emergency funds) for LIHEAP. The Bush Administration’s proposed cuts in LIHEAP funding would mean that approximately 500,000 fewer low-income families would receive assistance. And according to the Energy Information Administration, last year’s $1.7 billion regular LIHEAP budget would have to be increased by $345 million this year just for the program to provide assistance to the same number of households as last year.
The 108th Congress will complete FY 2003 appropriations when it convenes this month. In the event that Congress cuts LIHEAP funding, states are considering several actions to implement the Administration’s proposal, including reducing eligibility ceilings, cutting benefits, and limiting program sign-up periods. In other words: a lot more people will be a lot colder this winter.
This needn’t be. The president could promote LIHEAP funding as a payoff to fuel companies if it makes him feel better about doing something that actually helps people, but he needs to release this money or people are going to freeze.
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ACORN won that struggle. LIHEAP funding went up, not down. But John McCain voted against it.
In 2002, ACORN held its biennial national convention in Chicago. We staged a big march through the city for immigrants’ rights, and we headed out to the unbelievably wealthy suburbs north of Chicago. Victims of predatory loans from Household Finance from around the country simultaneously poured out of busses by the hundreds and thousands onto the lawns of the board members and CEO of Household. They knocked on the doors and spoke to those who had hurt them from a distance. When the police made them leave, ACORN members plastered “Wanted” posters all over the neighborhood telling the board members’ neighbors what crimes the Household executives were guilty of. Below is an account of the many-faceted campaign that resulted in Household restoring a half a billion dollars to its victims. During the negotiations for that settlement, it was this action at the board members’ homes north of Chicago that Household’s negotiators brought up again and again.
Flame-Broiled Shark: How Predatory Lending Victims Fought Back and Won
By David Swanson
Published in “The Wealth Inequality Reader” by Dollars and Sense and United for a Fair Economy
If someone told you that a bunch of low-income people, most of them African-American or Latino, most of them women, most of them elderly, had been victimized by a predatory mortgage lender that stripped them of much of their equity or of their entire homes, you might not be surprised. But if I told you that these women and men had gotten together and after three years of work brought the nation’s largest high-cost lender to its knees, forced it to sell out to a foreign company, and won back a half a billion dollars of what had been taken from them — one of the largest consumer settlements ever — you’d probably ask me what country this had happened in. Surely it couldn’t have been in the United States of the Second Gilded Age, the land of unbridled corporate power and radical government activism on behalf of the rich and the greedy.
And yet it was. These victims of predatory lending identified the problem and named it “predatory lending” in the late 1990s, and their campaign to reform Household International (also known as Household Finance and as Beneficial) played out from 2001 to 2003, concluding with a settlement that includes a ban on badmouthing the company. That’s part of why more people haven’t heard about this. The families who fought back and defeated Household are barred from bragging about it or teaching the lessons they learned, because that would require recounting the damage that Household did to homes and neighborhoods. These families are members of ACORN, the Association of Community Organizations for Reform Now. I was ACORN’s communications coordinator during much of the Household campaign but left before it ended. No one has asked me not to tell this story.
In low-income minority neighborhoods in the United States, what little wealth there is, is in home equity. Home equity makes up 74.9 percent of the net wealth for Hispanics in the bottom two income quintiles (0-40 percent), and 78.7 percent of the net wealth for African-Americans in the second income quintile (20-40 percent). There have been gains in minority home ownership over the past few decades, in part as a result of the work by community groups like ACORN and National People’s Action to force banks to make loans in these communities. But the home ownership is fragile and not protected by additional savings. Lenders in the past decade have focused on stripping away equity, and community groups have been forced to focus on keeping out loans that are worse than no loans at all.
Most high-cost loans are refinance loans. Too often they are marketed aggressively and deceptively, including through live-checks in the mail that result in very high-cost loans that the lender will be only too happy to refinance into a new mortgage. Often these loans are made with excessive, sometimes variable, interest rates, outrageously high fees, and fees financed into the loans so that the borrower pays interest on them and often is not told about them. They are made with bogus products built in, on which the borrower also pays interest. Hidden balloon payments force repeated refinancings for additional fees each time. Mandatory arbitration clauses attempt to prevent borrowers from taking lenders to court. The practice of loaning more than the value of a home traps borrowers in loans they cannot refinance with a responsible lender. Consolidation of additional debts further decreases equity, placing the home at greater risk. Quiet omission of taxes and insurance from a mortgage that previously included those charges results in a crisis when the yearly bills arrive.
Predatory lenders turn the usual logic of lending upside down. They make their money by intentionally making loans that the borrowers will be unable to repay. They charge fees for each refinancing until finally seizing the house. Fannie Mae has estimated that as many as half of all borrowers in subprime (high-cost) loans could have qualified for a lower cost mortgage. High-cost loans are not just made to people with poor credit. They’re often made, rather, to people who have poor banking services in their neighborhoods. After HSBC bought Household, it announced that 46 percent of Household’s real estate-backed loans had been made to borrowers with ‘A’ credit. Household made no ‘A’ loans.
ACORN members don’t take abuse of their neighborhoods lying down, and Household was a leading cause of the rows of vacant houses appearing in ACORN neighborhoods in the 1990s. ACORN launched a campaign to reform Household that included numerous strategies. One, an old ACORN stand-by, was direct action. Repeatedly, ACORN members in numerous cities around the country simultaneously protested in Household offices to demand reform. At the same time, ACORN was working to pass anti-predatory lending legislation in local and state governments and Congress. ACORN members made sure that in each case the victims testifying were victims of Household and that Household’s abuses were highlighted. When ACORN released major reports on predatory lending, the examples included were always from Household.
ACORN also worked with the Coalition for Responsible Wealth to advance a shareholder resolution that would have tied Household’s executives’ compensation to ending its predatory lending. In 2001 Household held its shareholders meeting in an out-of-the-way suburb of Tampa, Florida. A crowd of ACORN members was there with shark suits and shark balloons to protest. The resolution won 5 percent. Over the next year, ACORN pressured state pension funds and other shareholders. Household held its 2002 meeting an hour and a half from the nearest airport in rural Kentucky. ACORN members made the trip by car from all over the country. The protest may have been the biggest thing the town of London, Ken., had seen in years. The resolution won 30 percent.
As a result of ACORN agitation, various local and state governments threatened to divest from Household. ACORN also put pressure on stores like Best Buy that used Household credit cards. At the same time, ACORN Housing Corporation was assisting many Household victims in either refinancing out of their Household loans or at least canceling some of the rip-off services built into their loans, such as credit insurance. And ACORN was getting the word out through local ethnic media to stay away from Household.
ACORN wrote up numerous accounts of Household predatory loans and took them to the attorney generals in state after state urging investigations. ACORN similarly pressured federal regulators to act. And ACORN assisted borrowers in filing a number of class-action suits against Household targeting those of its practices that were clearly illegal even under existing law. ACORN let Wall Street analysts know what Household stood to lose from these law suits, as well as from various reforms that Household periodically announced in its attempt to hold off the pressure from ACORN.
But ACORN members never let up. They protested again and again at Household offices and held press conferences in front of homes about to be lost to Household. They protested the secondary market that was putting up capital for these predatory loans. And they held a major protest at the trade group that lobbied in Washington for Household and its fellow sharks. Then, in the summer of 2002, ACORN members took the step that Household executives would bring up again and again in later negotiations. On a beautiful summer day in the unbelievably wealthy suburbs north of Chicago, victims of Household from around the country simultaneously poured out of busses by the hundreds and thousands onto the lawns of the board members and CEO of Household. They knocked on the doors and spoke to those who had hurt them from a distance. When the police made them leave, ACORN members plastered “Wanted” posters all over the neighborhood telling the board members’ neighbors what crimes the Household executives were guilty of.
Through all of this, we worked the media. I kept a database of victims’ stories and contact info and put them in touch with reporters whenever the reporters were willing to tell not just the victimization story but also the story of fighting back. We generated several hundred print articles and several hundred TV and radio stories about Household’s predatory lending practices. We worked the small neighborhood papers, flyers in churches, posters on walls. We produced lengthy articles in the New York Times, Washington Post, Wall Street Journal, Los Angeles Times, and Forbes Magazine. We kept up an endless barrage in the trade press: the American Banker, National Mortgage News, etc. We maintained an enormous website about Household that no longer exists.
A handful of ACORN staff people with great expertise and unrelenting effort organized thousands of members to drive this campaign until Household agreed to pay victims $489 million through the 50 states attorneys general, and later agreed to pay millions more through ACORN, as well as to reform its practices.
This campaign was an example of what can be done if enough different angles are pursued at once and the company ripping you off is put on the defensive and constantly hit with the unexpected. And this campaign was a success by the one and only measure ACORN judges campaigns by: it increased the size and power of ACORN to effect future progressive change. This is good news for low-income neighborhoods, but bad news for Wells Fargo, the predatory lender who is next on ACORN’s list.