Our bank and church buildings look strong under our clear skies. Looking at Washington Mutual’s building, it’s hard to believe the subprime loan crisis damaged the bank. What bothers me is people worshiping in our church buildings could have prevented the crisis.

    Those churches are in denominations, which in turn are members of the Interfaith Council on Corporate Responsibility (ICCR).  The ICCR tried to stop unjust subprime loans as part of its mission: “through the lens of faith, ICCR builds a more just and sustainable world by integrating social values into corporate and investor actions.”
    The almost 300 ICCR members manage $100 billion in investments in socially responsible ways for religious institutions, pension funds and foundations. Members include Baptists, Disciples of Christ, Church of the Brethren, Episcopalians, Jews, Lutherans, Catholics, United Church of Christ, Unitarians and my Methodists.
    ICCR encourages subprime mortgages because homeownership fosters better neighborhoods. Sr. Valerie Heinonen, with the Mercy Investment Program in Orwigsburg, PA said, “Subprime lending done correctly allows working families to build assets through home ownership.” 
    But subprime loans must be based on ability to pay reasonable terms. Lenders hold borrowers accountable, but who holds lenders accountable.
    The ICCR tries. Since 1993 it filed stockholder resolutions requiring managers eliminate predatory lending practices.  It urged federal agencies to increase regulations. Little was done and little-by-little the system harvested rotten subprime loans. A local realtor told me she would not take clients to some local mortgage brokers. By 2000, 17% of all subprime loans did not have complete documentation of earnings. In 2001 the value of the loans was $136 billion.
    The loans have a higher failure rate so lenders prefer to sell them.  They found a way called securitization. They sold the loans to investment banks. Investment banks bundled the loans into investment securities. The ratings agencies gave the securities their highest quality ratings based on housing values.
    The ICCR warned that securitization allowed lenders to be even less accountable. Undocumented income infected 44 percent of subprime loans in 2006. Total funds exploded to $1.3 trillion by 2005.
    What haunts me is the silence in the congregations.  The ICCR has a direct link to churches across our land.  If injustices identified by ICCR had inflamed the denominations and the denominations gotten word to the pulpits, and the pulpits gotten word to the pews, perhaps a call for justice and accountability would have forced regulation.  Or maybe the pews would have emptied because we do want to sit in our churches and hear about financial injustice.