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A Housing Group Divided

Posted 4/25/2001

While city and state officials stumble around in search of ways to legislate away the predations of unethical banks, two groups that have fought against the backers of neighborhood-gutting bad loans have found unlikely outlets for their anger: each other.

The mini-feud between the Baltimore chapter of ACORN (Association of Community Organizations for Reform Now) and St. Ambrose Housing Aid Center--both members of the local Coalition to End Predatory Real Estate Practices--centers on St. Ambrose's acceptance of money from CitiFinancial, the locally headquartered outpost of the mega-mammoth CitiBank. CitiFinancial has donated $5,000 annually to the east-side nonprofit "for years," St. Ambrose executive director Vincent Quayle says, dating back to when the firm was the locally owned Commercial Credit.

ACORN contends that CitiFinancial's purchase of the Associates First Capital Corp. in November should make St. Ambrose rethink cashing those checks. According to ACORN, the Associates has been a major purveyor of high-interest, multiple-fee loans to poor and working-class inner-city residents (The Nose, March 14, www. citypaper.com/2001-03-14/nose3.html), resulting in lost homes and bankruptcy for many Baltimore mortgagees. The activist group also claims the Associates approved loans on "flipped" properties with artificially inflated value, and that CitiFinancial's stated desire to reform its new subsidiary doesn't go far enough to make up for the damage already done to city communities and homeowners.

"[CitiFinancial] should be working to make these people whole," says Mitchell Klein, organizer of ACORN's local chapter. "[Housing groups have] an opportunity to hold CitiFinancial accountable. Instead of accepting a few thousand dollars that doesn't go to help the affected homeowners, we should be putting up a united front."

Quayle says the flap between the two nonprofit groups arises from differences in approach. While St. Ambrose has established itself as an expert on the banks behind foreclosures in the city, ACORN has focused on predatory lenders. "We've been looking at [mortgage issues] from the foreclosure point of view," Quayle says. "CitiFinancial doesn't even show up on our lists" of major backers of loans on foreclosed homes. (One firm that does, EquiCredit Corp., has ties to Bank of America, which has a low-cost loan agreement with ACORN nationally.)

Further straining relations is Quayle's opposition to an ACORN-backed City Council bill sponsored by council member Keiffer Mitchell Jr. (D-4th District), which Klein alleges shows the St. Ambrose head's too-cozy ties to banking leaders. Quayle reviewed the measure, which would beef up penalties for lenders found to be engaging in predatory practices in Baltimore, at the request of the local banking industry, and he testified against it at a council hearing. (Quayle says Mitchell also sought his input on the bill.)

"I didn't even realize it was ACORN's bill when I testified--not that it would have mattered," Quayle says. "I told the [council] that, in my opinion, it was a lousy bill. . . . It would give those lenders who don't want to invest in Baltimore the perfect excuse not to invest." Rather than targeting predatory lenders, he maintains, the measure would hurt "the good guys, the local savings and loans."

Not that Quayle is without remorse over accepting money connected to the Associates. "I feel terrible about this, because all I know from CitiFinancial are its local people, whom I've known for years," he says. He adds that St. Ambrose plans to press for city or state legislation aimed at banks that target the poor for high-interest, high-fee mortgage loans and refinancing deals. Meanwhile, Quayle says he doesn't know whether St. Ambrose will keep accepting CitiFinancial's donations. "I haven't even thought about it, to tell you the truth," he says.

But where St. Ambrose sees a charitable contribution, ACORN sees a failure to see the forest for the trees. "We're all part of the same task force. There's a bigger win here than a little bit of money for one group," Klein says. "Basically, all we want our fellow [coalition] members to do is honor our organizing [against the Associates]. When they work against us, it's like they're crossing a picket line."

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