If you ever needed convincing that we need a strong, independent consumer protection agency, the continuing foreclosure crisis should provide all the evidence you need.
Today, National People's Action, in conjunction with our Chicago affiliates Lakeview Action Coalition and the South Austin Coalition Community Council, released a report detailing the impact of the foreclosure epidemic on the city of Chicago. The news is not pretty - Chicago foreclosure filings doubled between 2006 and 2008, and then jumped another 16% last year, making 2009 the worst year on record for foreclosures in the Windy City.
What started as predatory and subprime lending in communities of color on Chicago's south and west sides in the 1990s, spread like a virus to reach every corner of the city. It's a reminder to us that racially unjust policies eventually set us all back. We had a chance to step up as a nation and outlaw these practices when they first emerged. Had we done so, we would not be facing the challenges we face today.
Many of us sounded the alarm when subprime lending first hit neighborhoods, but the banking regulators failed to act. NPA met numerous times with the Federal Reserve, the Office of the Comptroller of the Currency, the FDIC, and the Office of Thrift Supervision. We provided documentation about the havoc that subprime lending was creating in communities nationwide and questioned the economic sustainability of predatory products. Unfortunately, our calls for action were ignored by the banking regulators. As you can imagine, this causes us to question the notion of a much needed consumer protection agency being housed by one of the same regulators that failed to use already existing powers to protect people and the economy.
Our report, "The Home Foreclosure Crisis in Chicago," demonstrates that we would all stand to benefit from increased consumer protection. The original wave of foreclosures in Chicago were the result of subprime loans. These bound to fail products created an unprecedented foreclosure crisis that sent our economy into a tailspin, resulting in millions of people losing their jobs, and then spurring a new wave of foreclosures, driven by unemployment.
No person or neighborhood has been untouched by this crisis. In 2009 there were 118 foreclosures filed per square mile in the city of Chicago, with the largest increases taking place in middle and upper income communities. Over the last five years the average Chicago homeowner has lost $27,000 of value in their homes, with over $15 billion in housing wealth being lost citywide during this period.
We have all been impacted by this crisis. Now, it's up to us to change the political equation. The banks have hijacked our democracy and it will take organized people power to take it back. In that vein, a set of mobilizations are being organized across the country by the AFL-CIO, National People's Action, SEIU, and the PICO National Network for March and April. NPA is organizing events on Wall Street, in Boston, and in the Heartland. We hope you will join us! For more information on how, go to web site, http://www.showdowninamerica.org.