Mortgage lenders face a Hobson’s Choice. When a lender doesn’t provide mortgage loans to people in high-crime areas with high default rates, that’s considered racist “redlining,” and subjects it to sanctions under federal laws such as the Community Reinvestment Act. But if it does provide such loans, that, too, is deemed racist “predatory lending” if borrowers subsequently default in large numbers (as happens whenever the economy heads into a recession, or interest rates rise). The lender is deemed racist no matter what it does.
While at the Justice Department, former Clinton Administration official Deval Patrick, who is now governor of Massachusetts, used the pressure of federal lawsuits to force lenders to make risky loans, threatening them with redlining charges. (His lawsuits were often baseless; under his tenure, the Justice Department was ordered to pay over a million dollars to the city of Torrance, California for a baseless suit, but most baseless suits led to little, if any, sanctions against the Justice Department, while forcing defendants to pay millions of dollars in legal bills to defend themselves against the Justice Department juggernaut).
Then he left the Justice Department to make more money by receiving money from lenders eager to curry favor with him and thus avoid the wrath of his friends still at the Justice Department. Lenders hired him for a small fortune to “counsel” them about “predatory lending.” “Once outside government, Patrick made a bundle providing ‘cover’ for one lender as it navigated the landscape of sub-prime lending in minority communities.”