DECEMBER 02, 2008
Barack Obama has repeatedly chastised failing banks for using subprime loans to victimize borrowers yet his newly crowned inauguration co-chair operated a bank that went under for doing it.
Obama’s prized campaign finance head turned inauguration co-chair, Chicago millionaire Penny Pritzker, was chairwoman of the board of a financial institution that made money (then crashed) giving what the president elect often refers to as “predatory loans” at “teaser rates.”
Subprime loans carry a higher rate of interest than prime loans to compensate for the increased risk of borrowers with bad credit or those who lack the income to qualify for a regular loan. Like Obama, the Department of Housing and Urban Development says minorities, especially blacks, are overwhelmingly targeted by predatory subprime lenders.
Pritzker’s key role in the mess is conveniently omitted from the accolades portion of her biography, which describes her as a business executive and entrepreneur who chairs four major corporations.
The reality is that Pritzker ran Chicago’s Superior Bank before it collapsed precisely for making too many subprime loans, which she personally pushed for. When the bank went under 1,400 of its customers—Obama might prefer to use the term victims—were left without part of their savings.
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