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October 7, 2008 8:19:29 AM CDT

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Subprime Lender Lobbying Foiled Safeguards

Posted Dec 31, 07 10:59 AM CST in Business 

(Newser) – Subprime giant Ameriquest spent more than $20 million on political donations from 2002 to 2006 to successfully lobby against lending restrictions meant to protect borrowers, reports the Wall Street Journal. Though the company spent millions at the national level, its focus was local, where regulators were cracking down on predatory lending. Countrywide, Citigroup, and Wells Fargo also joined the quest for softer rules.

In Georgia, state legislators who received hefty political donations helped overturn a fair lending law. "Ameriquest was very, very engaged," says a state senator. Ameriquest founder Roland Arnall, a major contributor to President Bush, was named ambassador to the Netherlands last year. Also in 2006, Ameriquest paid $325 million to settle claims it cheated customers, and the company remains a target of hundreds of lawsuits.

Source Wall Street Journal

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Quarterly foreclosures   (Associated Press)
Angelo Mozilo, Chairman and CEO, Countrywide Financial Corp. speaks during a panel discussion on the subprime market fallout Monday, Oct. 29, 2007, in Beverly Hills, Calif. (AP Photo/Ric Francis)   (Associated Press)
A man walks into a Countrywide banking and loan office in San Mateo, Calif., Friday, Oct. 26, 2007. Countrywide Financial Corp. lost $1.2 billion in the third quarter, but its shares soared Friday after...   (Associated Press)
A foreclosure sign tops a sale sign outside an existing home on the market in northwest Denver in this Aug. 29, 2007 file photo.   (Associated Press)
Map shows percent change in the monthly number of foreclosures from a year ago.   (Associated Press)
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subprime mortgages  • Citigroup  • borrowers  • Wells Fargo  • Countrywide Financial


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