Big Campaigns Sprout From Little ACORN

Manicured cleanliness and calm are the norm on the tree-lined streets of Wilmette, an affluent town just north of Chicago. The people on the streets are usually well-behaved and polite; the majority of the faces are white.

So it caused quite a scene when six tour buses pulled up outside the large brick home of John Edwardson on a peaceful Sunday afternoon and several hundred people of all ages and ethnicities poured out, chanting, blowing whistles and carrying signs and inflatable sharks. The crowd proceeded to trample Edwardson's lawn, march around his semi-circular driveway and litter the grass and steps with blue fliers accusing him of being a loan shark. The protesters staged a mock foreclosure on Edwardson's house, posting a sign saying "Foreclosed Upon for Moral Bankruptcy."

Edwardson is a member of the Board of Directors of Household Financial, one of the country's largest lending institutions. The protesters were members of ACORN (the Association of Community Organizations for Reform Now), a national group with about 120,000 members.

During ACORN's biannual national conference in Chicago last weekend, about 2,000 members visited the homes of Edwardson, Household CEO William Aldinger III and other board members. They were trying to draw attention to what they allege are the widespread predatory lending practices of Household, using the kind of tactics that have gained them media attention and plenty of enemies in ACORN's 32 years of existence.

"This is a grassroots organization of poor people and low-income people, with low-income people running the organization," said ACORN president Maude Hurd, who lives in Boston. "That's what sets us apart from other organizations."

Grassroots and Proud of It

While national in scope, ACORN is based on a community organizing model in which families and individuals who participate in local struggles are then invited to join the organization (for a fee of $5 per month). Members help identify community problems and work to get them resolved. They work on local issues, like cleaning up problem buildings and liquor stores, demanding street repairs or getting rid of vermin, as well as joining with other chapters in national and local campaigns around labor and immigrants' rights, education and other issues. There are local, state and national boards that make decisions with input from members.

At an all-day rally and speak-out during the conference, which resembled both a spiritual revival and a high school basketball game complete with foot-stamping, dancing and cheering, ACORN members sang the praises of the organization.

"They helped us get some of our insurance money back and helped us get our loan down," said Betty Coy of Apple Valley, Minnesota. She and her husband Gary were victims of predatory loans made by Household and its subsidiary Beneficial. They called ACORN after seeing an ad on TV about the campaign against Household, and they said ACORN helped them from losing their home. Now they are active ACORN members.

"I'm not done with Household yet," said Gary Coy, noting that the couple plans to join a national class action lawsuit ACORN filed against Household in May. "Until they make everyone's loans right, I'll keep fighting right along with ACORN. If I can stop them from doing this to even one other person it will all be worth it."

ACORN is not without criticism, both from its corporate and government targets but also other non-profit and economic justice organizations. It is well-known for being loud and splashy, which some pundits say is counterproductive or at least less effective than the quieter, more focused legislative efforts of other lobbyist groups. Both its friends and enemies also sometimes take exception to ACORN's claiming credit for legislative victories that were worked on by a wide range of groups.

"ACORN is always talking about what they're against and not what they're for," said Robert Woodson Sr., a civil rights activist and leader of the National Center for Neighborhood Enterprise. Woodson thinks that particularly in campaigns like the one against Household, ACORN could achieve a lot more by taking a more cooperative approach.

But ACORN members don't apologize for being loud and annoying, and say that in most cases that's what it takes for them to get their voices heard.

"We make a lot of noise but we also get a lot done," said Hurd. "We've tried other ways, and they didn't work for us. We are a direct action group and we always will be. We're good at negotiating too, but for low-income people just to get to the negotiating table, you have to make some noise."

"A lot of these other organizations do letter writing, but I think those just get thrown in the garbage," added Alton Bennett, a Minneapolis ACORN member for 16 years and the current national treasurer. "You can't throw 2,000 people in the garbage."

Others in the responsible lending field and advocates for the rights of low-income people in general know how hard it can be to even catch the eye of media and politicians who would just as soon ignore their less powerful constituents.

"I don't think there's any question ACORN has had success," said Birny Birnbaum, executive director of the Austin-based Center for Economic Justice. "They raise awareness of injustice and shine the spotlight on the perpetrators of injustice. That is an essential role."

Hooked on Household

In the past few years predatory lending has been one of ACORN's primary focuses, and it has made Household the poster child of this campaign.

In a nutshell, predatory lending refers to the making of deceptive loans that are filled with high interest rates and hidden fees, slapping the borrower with a future of debt they may never get out from under. Usually the loans are made in the subprime market, to people with bad credit who can't get more conventional loans, though one of the major criticisms of Household and other predatory lenders is that they manage to rope even people with good credit into predatory loans.

"They'll stick people with loans that are worth 120 percent of the value of the house, more than the house is worth, so they're locked in," said Lisa Donner, director of ACORN's financial justice center. "They can't even sell because they'll lose money, but if they don't keep paying the loan they'll lose the house. This happens even to people with sterling credit."

ACORN has locked onto Household like a pit bull during the predatory lending campaign, carrying out dozens of direct actions at various Household offices and subsidiaries around the country, advocating on behalf of individuals who have gotten predatory loans from Household and lobbying for state and local legislation curbing predatory lending.

"I don't think anyone else combines the legislative advocacy with doing the work on the ground and having relationships with members the way we do," said Donner. "The campaign comes to us not in that there's a public policy problem, but in that there's a problem in the neighborhoods. The idea is getting people to address the problem themselves and do something about it. That means direct action, exposing the problem and making sure it can't be ignored, and it also has to do with bringing people together so they see they're not the only ones dealing with this."

ACORN has two class action lawsuits pending against Household -- one in Oakland, Calif. and the national suit filed in May in Prospect Heights, Illinois, the Chicago suburb where the company is based. Also in May ACORN members worked with the group Responsible Wealth to introduce a resolution at the Household shareholders meeting, proposing that executives' salaries be tied directly to the company's progress in curtailing predatory lending.

The shareholders meeting was held in rural Kentucky, far from any major airport, a fact that ACORN spokesperson David Swanson sees as a deliberate effort to avoid media coverage and pressure from activists. A significant 27 percent of shareholders, including the Minnesota state pension fund itself, voted in favor of the resolution, though not surprisingly it was not adopted by Household.

Last summer Household joined Citigroup and other lenders in "voluntarily" ending the sale of single premium credit insurance, a policy in which borrowers are persuaded to buy insurance that would keep them from defaulting on their mortgage payment in case of disability or death. The insurance is sold in one costly lump sum up front, which the borrower then ends up paying high interest on for months to come. Housing experts say the insurance is almost completely unnecessary, since normal life insurance policies usually offer the same coverage.

In the media, Household spokespeople acknowledged that it was largely due to negative press coverage that they stopped selling the insurance. Malcolm White of the North Carolina-based Coalition for Responsible Lending gave ACORN credit for playing a large role in this victory.

"In May a senior executive at Household told me 'You will never see companies selling mortgages without single premium credit insurance,'" he said. "But by July they had stopped selling it. I was absolutely amazed. They had felt the heat from people like ACORN."

Toughest Law in the Country

ACORN has pushed hard for anti-predatory lending legislation in cities and states across the country, usually with positive results. In the last few years ordinances have been passed in more than 80 cities and counties.

In Philadelphia last year, ACORN helped pass what Swanson called "the toughest law in the country" fighting predatory lending. But industry lobbyists managed to fend off the legislation by successfully pushing the state to pass a law forbidding any local laws regarding lending. A similar thing happened in California, where a strong anti-predatory lending law had been passed in Oakland but challenged in court by the industry. This spring the state Supreme Court ruled that the city law could stand.

Household maintains that the company is "passionate" about practicing fair lending, according to spokesperson Megan Hayden.

"We've always taken fair lending as the most important part of our business," said Hayden. "You clearly don't stay in business as long as we have by defrauding your customers. That wouldn't make strategic sense. We're in the business of serving customers who've been shut out of the credit market, and we do that in a way that's fair and ethical and understanding."

Beyond Predatory Lending

ACORN also works on immigrants' rights issues, education, housing quality and service issues, living wage fights, police misconduct, public utilities, labor issues and really anything else the membership chooses to address.

The group is working on living wage campaigns, including one in Chicago where they are demanding that in order for aldermen to get the salary increases they want, they must increase the mandatory living wage paid by companies with city contracts. They used this same tactic to get Chicago's original living wage bill passed.

"In terms of living wage, the main opponents are the big hotel and restaurants owners," Swanson said. "Raising the minimum wage is a very popular issues -- 85 percent of Americans want to do it but we're up against powerful and rich opponents who make contributions to political campaigns and file lawsuits every chance they get."

In New Orleans, they are working on passing the country's first living wage bill that would cover not only city workers and businesses with city contracts but literally everyone in the city. The bill was passed by the city of New Orleans, but hotel and restaurant owners filed suit claiming municipalities don't have the right to pass such a bill. The Louisiana Supreme Court is now ruling on the issue, though a decision isn't expected until September.

"That was a six-year fight," said Donner.

On the education front, ACORN members are running campaigns to increase the quality of teaching in several states. In Boston ACORN has been pushing for better-prepared substitute teachers and more quality teachers period in the grossly understaffed and underfunded public schools in lower income areas. Likewise in Chicago they have been advocating on behalf of the so-called "worst performing schools," those that have been placed on probation and scheduled for closing under the city's controversial school reform policy. In several states, ACORN branches have been fighting the privatization of education, including defeating the Edison for-profit school chain's attempted takeovers of public education systems in Philadelphia and New York.

Along with the predatory lending component, immigrants' rights were a major focus of the Chicago convention. On July 1 ACORN joined with various Chicago area immigrant groups for a massive rally and march downtown. Specifically, they are continuing the ongoing campaign for amnesty for all immigrants, and also demanding that immigrants who are not citizens be allowed to have drivers licenses, and don't lose their jobs or suffer persecution because of not having valid social security cards. In Connecticut, legislation has been proposed that would ban even legal resident immigrants from having drivers licenses.

"Today we will rattle the windows of downtown Chicago so they know ACORN means business," said an ACORN member speaking from the stage during the rally. "We want all of our people, citizens or not, to be able to have drivers licenses, to have jobs and work in dignity."

The march also included a contingent from the SEIU (Service Employees International Union) Local 880. Local 880 home health care workers, paid by the state of Illinois, haven't had a raise in three years. A $1 an hour pay increase was supposed to go into effect on July 1, but it was axed as part of state budget cuts even while the budget included a tax break for the wealthiest 2 percent of families equaling $1.5 billion over five years.

Socorro Aranda, a Latina woman from Los Angeles who has been an ACORN member for two years, said (in Spanish) that she has been part of victories with the group in different parts of California, including securing state funds to aid low-income homeowners and shutting down predatory lenders.

"We are supporting everyone, working shoulder to shoulder, working for legalization for everyone, an end to discrimination and housing with dignity for everyone," said Aranda, 63, who works as a cleaning lady in a clinic. "Being united is the only way we will win."

Kari Lydersen has written for many publications, including the Washington Post, Chicago Ink, the Chicago Reader and In These Times.

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