August 29, 2008
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April 29, 2008

Who's suckering whom?

Thomas Lifson
Barack Obama is trying to have it both ways again.  On the campaign trail he decries  "predatory" subprime lending, and declares,

"Part of the reason we got a current mortgage crisis has to do with the fact that people got suckered in to loans that they could not pay,"

Yet his campaign's finance chief, Penny Pritzker, who was chairman of the board of subprime lender Superior Bank of Chicago, which subsequently failed, leaving 1400 of its customers without part of their savings.

We know all of this thanks to the excellent work of Chicago Sun-Times writer Abdon M. Pallasch: 

Obama's campaign notes that Pritzker stepped down as chairwoman of the bank's board in 1994, seven years before it failed. She then went on the board of the bank's holding company.

But a letter obtained by the Chicago Sun-Times shows that until the end, Pritzker appeared to be taking a leadership role in trying to revive the bank with an expanded push into subprime loans.

Pritzker wrote in May 2001 that her family was recapitalizing the bank, and she pledged to "once again restore Superior's leadership position in subprime lending." The bank shut down in July 2001.

Pritzker's attorney Kevin Poorman and Obama's campaign spokesman emphasized that not all "subprime lending" is the "predatory" kind that Obama and White House rival Hillary Clinton rail against. The kind of subprime lending Superior was doing in 2001 was not predatory, Poorman said.

But at least some of the 1,400 victims who are still owed money seven years after the bank failed say Pritzker is the wrong person for Obama to put in charge of the campaign's finances when part of his campaign is about reforming the banking industry.

I would be very interested in hearing an explanation from Barack Obama of the precise difference between predaory and non-predatory subprime lending. Especially keeping in mind the widespread liberal outrage (and subseqent government penalties) over so-called "redlining" (the denial of credit to poor people, especially blacks).

Prizker is, incidentally, heiress to the Hyatt Hotels fortune, and a Chicago buddy of Barack Obama. She has her many millions of dollars, while Superior Bank customer have lost their savings. I guess this is the sort of hope and change Obama plans to bring to America, with financial help from Prizker.


Hat tip: Ed Lasky

Posted at 03:36 PM | Email |

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