One of the more alarming features of the “sub-prime” lending crisis is that it was widely noticed by grass-roots advocates. For years, from South Brooklyn Legal Services , from The Neighborhood Economic Development Advocacy Project and The Children’s Defense Fund-NY have come warnings of the foreclosure wave now swamping lower income New Yorkers and some speculators in “sub-prime” mortgage securities. Predatory, often utterly fraudulent, lending practices have been draining painfully accumulated economic capital from lower income minority communities. Click here for a story on the NYC foreclosure spike. Cries of alarm and calls for policy shifts in the fall of ’06 (CDF-NY sponsored conference at UFT) and the winter of ’07 (the Alliance For Fairness In Lending campaign of progressives, unions and policy groups) had no political traction whatsoever.

The Drum Major Institute meets on this issue this Thursday, October 11, 8-10AM at Pace University's Downtown Conference Center. Light breakfast, free. Registration hot link and more information after the jump

The NYC Council, deeply committed – it seems to me -- to resolutions instead of solutions has resolved that somebody else, bank regulators, should do more . State Senator Liz Kreuger, writing here at The Daily Gotham proposed wide ranging reforms which, so far have not been the subject of substantial debate. The NY Times objects to the inadequate response of the Bush administration . How can the debate be moved forward?

This Thursday morning, October 11, 2007the Drum Major Institute will take on the call for practical policy reform in an early morning (8:00-10AM) meeting at Pace University’s Downtown Conference Center at 157 William Street (at Ann Street, 1 block north of Fulton Street) (around the corner from J&R). Find out more and sign up here .

The model under discussion is a Minnesota statute which requires lenders to focus more on borrowers' loan repayment capacity. This is a very partial and, in my view, inadequate response. We need to save the homes and equity of loan fraud victims. We need to redress the devastation brought to lower income neighborhoods by pirates claiming to be loan arrangers. Further, lower income people need real access to affordable credit, erecting lending barriers is only a very small portion of the solution. But perhaps I’ll learn a whole lot more about it. Read Elana Levin link-filled blog-post here.

The story of sub-prime lending has been told a variety of ways. At the Columbia Journalism Review, Dean Starkman looked a the role of Citibank and how the MSM has covered it here and here . The articles and the stories linked to them are worth a detour.

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