The Brooke Amendment And Section 8 Housing: Revisited

7 05 2019

 By Timothy D. Naegele[1]

This is the title of my newest law review article[2] that discusses the landmark laws enacted by Congress: the “Brooke Amendment” with respect to public housing, and the “Section 8” housing program that was intended to extend the benefits of the Brooke Amendment to housing wherever it is located. Put succinctly, the Brooke Amendment capped the payment of rent at twenty-five percent of a person’s income, with the federal government paying the difference; and it provided funds to improve public housing, and to assure the safety of its residents.

Section 8 was envisioned as giving “vouchers” to those who qualified for public housing, and permitting them to find housing anywhere, with the federal government subsidizing their rents when the twenty-five-percent-of-income threshold was passed. Taken together, the Brooke Amendment and Section 8 were America’s answer to the needs of decent housing for its poor. Today, there are two million voucher families.[3]

The United States has an unenviable record of providing affordable housing for its poor, much less for the poorest of the poor—America’s homeless. They have lived on the streets and wherever they could find shelter; and they have been shunned as “lepers” and cast aside to fend for themselves. Many have been and are in desperate need of mental health care and treatment; and they are not far removed from the poor of Calcutta, who have been chronicled down through the decades.

This is particularly true of the elderly, disabled and families with young children, who have slipped through the “cracks” and the societal “safety nets,” to the extent that such protections still exist. However, the elderly of the Boston area were singled out for humane, dignified and uplifting treatment and protection in the late 1960s and early 1970s, when work began by Senator Edward W. Brooke and me in the U.S. Congress—through its two banking committees—to address their plight.

Since then, billions of dollars have been expended, and millions of poor Americans have been helped, which tragically has only scratched the surface—as the numbers of chronically poor and those who are unable to afford private rents continue to rise in the United States. The ever-accelerating cost of housing, and the short supply of existing affordable housing units, have priced many Americans with even good jobs out of decent housing across America, in such areas as “Silicon Valley” (or the San Francisco Bay Area).

They have lived in campers, recreational vehicles (“RVs”) or wherever they could find to sleep. The effects on the poorest of the poor—those farther down the economic totem pole—have been catastrophic, especially in those areas of the United States where inclement weather is a major factor. Many have died, or been victimized, as homeless shelters have been inadequate or closed entirely for various reasons (e.g., funding and/or staffing shortages) in areas where they are needed the most.

Yesterday’s problems are compounded by staggering mental health issues relating to America’s poor and homeless; violent gang activities such as MS-13; dilapidated public housing projects, which may not be helped by the infusion of more federal funds; Social Security retirement benefits that have not kept pace with the costs of food, housing and the medical needs of America’s elderly poor; the influx of illegal immigrants from other countries, who have few discernible skills and nowhere to live; the shortage of qualified professional staff members who can deal effectively with such problems and challenges, and truly make a positive difference; and the increasing demand by most Americans for affordable housing, which has outstripped the available supply.

One size does not fit all. What works in one community may not work in another. And simply throwing money at the staggering problems might not be any solution at all. U.S. taxpayers may say “enough is enough,” and they might be right—at least with respect to their own self-interests. Money cannot be wasted if federal housing programs are to enjoy broad support from the American people. The tasks today are daunting, but the United States and Americans have risen to the challenges of the past, and may be expected to do so in the future.

 

Ed Brooke

[Senator Edward W. Brooke (1919-2015)]

 

© 2019, Timothy D. Naegele


[1]  Timothy D. Naegele was counsel to the United States Senate’s Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass). He and his firm, Timothy D. Naegele & Associates, specialize in Banking and Financial Institutions Law, Internet Law, Litigation and other matters (see www.naegele.com and Timothy D. Naegele Resume-19-4-29). He has an undergraduate degree in economics from the University of California, Los Angeles (UCLA), as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University. He served as a Captain in the U.S. Army, assigned to the Defense Intelligence Agency at the Pentagon, where he received the Joint Service Commendation Medal (see, e.g., https://en.wikipedia.org/wiki/Commendation_Medal#Joint_Service). Mr. Naegele is an Independent politically; and he is listed in Who’s Who in America, Who’s Who in American Law, and Who’s Who in Finance and Business. He has written extensively over the years (see, e.g., www.naegele.com/whats_new.html#articles), and can be contacted directly at tdnaegele.associates@gmail.com

[2]  See Timothy D. Naegele [NOTE: To download The Banking Law Journal article, “The Brooke Amendment And Section 8 Housing: Revisited,” please click on the link to the left of this note]; see also https://naegeleblog.wordpress.com/2015/01/03/edward-w-brooke-is-dead/ (“Edward W. Brooke Is Dead”) and https://en.wikipedia.org/wiki/Edward_Brooke (“Edward Brooke”)

[3]  But see https://crosscut.com/2019/04/despite-new-law-landlords-continue-turn-away-applicants-section-8-vouchers (“Despite new law, landlords continue to turn away applicants with Section 8 vouchers”) and https://laist.com/2019/04/10/la_wants_to_stop_landlords_from_rejecting_low-income_housing_vouchers.php (“LA Wants To Stop Landlords From Rejecting Section 8 Vouchers”) and https://www.scpr.org/news/2019/04/12/89035/la-considers-prohibiting-landlords-from-rejecting/https://www.scpr.org/news/2019/04/12/89035/la-considers-prohibiting-landlords-from-rejecting/ (“LA considers prohibiting landlords from rejecting housing assistance vouchers”—”Nearly half of the people getting a Section 8 voucher in L.A. will end up losing it because they can’t find any landlords who will rent to them”) and https://www.latimes.com/opinion/editorials/la-ed-section-8-discrimination-law-homeless-20190419-story.html (“End Section 8 housing discrimination”—”[A]t a time when cities and counties are increasingly relying on vouchers to help reduce homelessness, many landlords won’t even consider leasing to tenants whose rent would be paid, in whole or in part, by the government. The problem is particularly acute in cities with high rents and low vacancies. In Los Angeles, nearly half the people trying to use a Section 8 voucher had it expire in 2017 before they could find a place to live, up from 18% in 2011. Several cities, including San Diego, San Jose and San Francisco, have already banned discrimination against tenants with Section 8 and other housing vouchers.  . . . But California can’t end housing discrimination on a city-by-city basis. State lawmakers need to go further and pass Senate Bill 329, which would enact the ban statewide.  . . . Landlords argue that high denial rates aren’t driven by discrimination but by the paperwork, inspections and restrictions that come with rental subsidy programs. For example, it’s hard to raise the rent, even modestly, on voucher tenants. Plus, they note, the supposed “market rent” the federal government is willing to cover is often too low in California’s overheated markets, where the bigger problem is a lack of affordable housing units”) and https://www.bostonherald.com/2019/04/25/boston-receives-1000-housing-vouchers-for-homeless/ (“Boston receives 1,000 housing vouchers for homeless”) and https://wpdh.com/ny-landlords-cant-discriminate-against-section-8-anymore/ (“NY Landlords Can’t Discriminate Against Section 8 Anymore”) and https://www.wbez.org/shows/wbez-news/more-section-8-vouchers-in-chicagos-black-neighborhoods-than-a-decade-ago/e461cdf4-22d1-45bd-9522-e0983c2d1c08 (“Chicago’s Section 8 Vouchers Increasing In Black Communities, Declining In White Neighborhoods”) and https://dc.curbed.com/2019/5/9/18538152/dc-nonprofit-fair-housing-law-online-course (“D.C. nonprofit offers online fair housing course designed to prevent discrimination by landlords”)





The Bank Holding Company Act’s Anti-Tying Provision: Almost 50 Years Later

25 08 2018

 By Timothy D. Naegele[1]

The way that you bank is about to change, in ways you cannot fathom today.

The title of this article is also the title of a new law review article of mine—the third in a series for the esteemed, almost 130-year-old Banking Law Journal—which discusses the changes that are occurring.[2]  To protect those who deal with banks and other financial institutions, Congress enacted the anti-tying provision of the Bank Holding Company Act in 1970, which I wrote as a young attorney when I was counsel to the U.S. Senate’s Committee on Banking, Housing, and Urban Affairs.  The law established per se illegality for predatory tying on the part of such banks and other financial institutions.[3]

One commentator has noted:

[B]ankers looking at a wealth of new products have their eye on Section 106 of the Bank Holding Company Act Amendments of 1970, otherwise known as the Anti-Tying provision. This law bars a bank from providing or pricing one financial product on the condition that a customer commit to another, unrelated product.  . . .

As banks learn more and more about their customers and begin to build new products and packaged offerings, anti-tying laws will become increasingly dangerous. Institutions that can successfully navigate this law will be able to offer new, data-driven services, making mortgage offers to consumers who’ve just begun looking, or offering financial advice to households that may not even realize they’re in trouble yet.

Banks which are not careful, however, can very easily find themselves offering packaged deals that will bring the [regulators and/or litigators] calling.

Technology is about to change the way retail banking works, as long as they can stay on the right side of the law.[4]

More foreign entities are likely to enter U.S. markets, and do everything imaginable to escape the reach of American laws such as the anti-tying provision. This has been happening already. And at least one prominent U.S. District Court has looked the other way, with respect to (1) a California plaintiff, (2) a bank incorporated under the laws of Australia that maintained representative offices in Houston, (3) where “decisions” were made ostensibly in London.[5]

The anti-tying provision remains an effective tool that provides treble damages and other financial rewards to those who have been injured by the misconduct of banks and other financial institutions.

Capitol and flag

© 2018, Timothy D. Naegele


[1]  Timothy D. Naegele was counsel to the United States Senate’s Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass). He and his firm, Timothy D. Naegele & Associates, specialize in Banking and Financial Institutions Law, Internet Law, Litigation and other matters (see www.naegele.com and Timothy D. Naegele Resume). He has an undergraduate degree in economics from the University of California, Los Angeles (UCLA), as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University. He served as a Captain in the U.S. Army, assigned to the Defense Intelligence Agency at the Pentagon, where he received the Joint Service Commendation Medal (see, e.g., https://en.wikipedia.org/wiki/Commendation_Medal#Joint_Service). Mr. Naegele is an Independent politically; and he is listed in Who’s Who in America, Who’s Who in American Law, and Who’s Who in Finance and Business. He has written extensively over the years (see, e.g., www.naegele.com/whats_new.html#articles), and can be contacted directly at tdnaegele.associates@gmail.com

[2]  See Timothy D. Naegele, The Anti-Tying Provision: Its Potential Is Still There, 100 BANKING L. J. 138 (1983) (Naegele 1983) [http://www.naegele.com/articles/antitying.pdf]; Timothy D. Naegele, The Bank Holding Company Act’s Anti-Tying Provision: 35 Years Later, 122 BANKING L. J. 195 (Naegele 2005) [http://www.naegele.com/documents/antitying_3.pdf]; Timothy D. Naegele, The Bank Holding Company Act’s Anti-Tying Provision: Almost 50 Years Later—Part I, 135 BANKING L. J. 315 (June 2018) (Naegele 2018, Part I) [Timothy D. Naegele-Part I]; Timothy D. Naegele, The Bank Holding Company Act’s Anti-Tying Provision: Almost 50 Years Later—Part II, 135 BANKING L. J. 372 (July/August 2018) (Naegele 2018, Part II) [Timothy D. Naegele-Part II] [The combined article, which was printed as Parts I and II, can be read by clicking on this link: Timothy D. Naegele Banking Law Journal]. See also Timothy D. Naegele, Are All Bank Tie-Ins Illegal? 154 BANKERS MAGAZINE 46 (1971) (Naegele 1971) [http://www.naegele.com/articles/banktieins.pdf]; and Naegele 2018, Part I, p. 318 n.3 (“[T]hose within the Federal Reserve System (‘Fed’) tried to weaken [the anti-tying provision] with a proposed ‘interpretation’ [that the Fed never adopted . . . and wisely so]”) (see also OP-1158_56_1 [letter sent by Timothy D. Naegele to each member of the Federal Reserve Board (March 16, 2005), and Timothy D. Naegele, Fed Plan Would Simply Gut Enforcement Of Ban on Tying, AMERICAN BANKER (January 21, 2005)]); and Timothy D. Naegele, Standby Letters of Credit And Other Bank Guaranties, Compendium Of Major Issues In Bank Regulation, Committee On Banking, Housing And Urban Affairs, United States Senate 621 (May 1975) [Naegele-Standby Letters of Credit And Other Bank Guaranties].

[3]  It is the only American law that was adopted expressly to prevent such predatory tying arrangements by banks and other financial institutions.  The Sherman and Clayton Acts were deemed inadequate to address such problems.  See, e.g., Naegele 2018, Part I, p. 335 (“Tying, of course, is an antitrust violation, but the Sherman and Clayton Acts did not adequately protect borrowers from being required to accept conditions to loans issued by banks. Section 106 was specifically designed to apply to and remedy such bank misconduct”).

[4]  See Eric Reed, “How to Make the Most Money From Your Bank in 2018,” TheStreet (Feb 15, 2018) (emphasis in original) [https://www.thestreet.com/story/14489253/1/how-to-make-the-most-money-from-your-bank-in-2018.html]; see also Naegele 2018, Part I, n.2.

[5]  See Signal Hill Service, Inc. v. Macquarie Bank Limited, 2013 U.S. Dist. WL 12244056 (C.D.Cal. June 12, 2013); see also Naegele 2018, Part II, n.78-95.

 

 








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