Even as thousands of people were losing their homes in the subprime mortgage lending mess that many economists say set off instability in the US and world financial markets, the mortgage lending industry spent generously in Washington on federal lobbying and campaign contributions and fended off attempts at regulation and oversight, a Common Cause study shows.
The report shows that even as record numbers of people began home foreclosure proceedings after receiving mortgages they could not afford, the mortgage lending industry spent nearly $32 million in 2007 lobbying the federal government and donating to Members of Congress and the national political parties. That came on the heels of $187 million the industry spent lobbying in Washington from 1999 to 2006, and likely contributed to Congress' hands off approach to oversight or regulation, even as consumer advocates predicted problems with subprime lending.
While campaign donations favored Republicans prior to 2007, mortgage industry donations moved toward Democrats once they took control in 2006. The industry contributed $1.23 million to Democrats and $1.21 million to Republicans from January to June 2007.
"This situation shows once again that we will not have public policies that are truly in the interest of the public in critical areas like housing until we get special interests out of the business of paying for the political campaigns of our elected officials," said Bob Edgar, president of Common Cause.
The third in a series of "Ask Yourself Why" reports focusing on how average Americans are affected by special interest spending in Washington, this report, originally released in October, is an update to a June report that looked at the mortgage lending industry's record of generous spending in Washington DC on lobbying and campaign contributions, and its success in blocking legislation to protect consumers from subprime mortgage loans they can not afford.
Click here to read the updated report with charts that show political action committee donations from the largest subprime mortgage lenders, their trade associations and parent corporations, as well as top recipients in the House and Senate of mortgage industry contributions.
Click here to read the original report, which includes political action committee donations from the largest subprime mortgage lenders, their trade associations and parent corporations, as well as top recipients in the House and Senate of mortgage industry contributions.
Office: Common Cause National
Issues: Money in Politics
Tags: Exposing Corporate Power
Common Cause is a nonpartisan grassroots organization dedicated to upholding the core values of American democracy. We work to create open, honest, and accountable government that serves the public interest; promote equal rights, opportunity, and representation for all; and empower all people to make their voices heard in the political process.