by David Nuttle

Created on: January 31, 2009   Last Updated: March 24, 2009

Many U.S. bankers, and home mortgage lenders, have clearly engaged in a form of legalized racketeering, or predatory lending, since 1999. The legal basis of such criminal activity is gained and sustained by paying bribes to members of the U.S. Congress, as a way to create and promote legislation to make illegal activities legal or easily hidden (if not legal). A racketeer is one who gets money from other people by illegal means. Bankers have been known to use such illegal means, but they prefer to bribe Congressmen to change the law so their illegal activity at least has the appearance of being legal.

In 1999, bankers and home mortgage lenders paid U.S. Senator Phil Gramm in excess of $1 million in bribes to sponsor, promote, and help to pass legislation (the Gramm-Leach-Bliley Fianacial Modernization Act) allowing predatory lending directed at new home buyers. This legislation removed most of the reporting and regulatory requirements for these lenders, and thereby created the basis for our current subprime home mortgage crisis. This crisis will cost taxpayers an estimated $3 trillion. The acts of bribery, and the intent to hide illegal, planned predatory lending is what allowed the bankers to engage in racketeering.

Similar bribery tactics were used in 2000 to get Senator Phil Gramm to promote passage of the U.S. Commodity Futures Modernization Act to effectively remove all restrictions on the derivatives industry. As a result, derivatives were then allowed to become an unusual combination of insurance, gambling, and high stakes bookmaking designed to make "junk" securities attractive to investors. Banks and home mortgage lenders were thus able to create thousands of highly risky subprime loans, and then sell this "junk" to investors as AAA rated "collateralized debt obligations." The International Monetary Fund (IMF) estimates that investors, worldwide, will suffer $945 billion in losses due to such open racketeering.

With the creation of a planned basis of predatory lending, many bankers and home mortgage lenders rushed to attract very high-risk, unqualified home buyers with offers of easy, low-cost home mortgages. By creating false, inflated home values, and by reporting false, inflated borrower income(s), they qualified these borrowers for home mortgages. In accepting adjustable rate mortgages (ARMs) being offered, borrowers generally believed the bankers when they were told they could afford debt service on their home mortgages. However, lenders were usually

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