Christianity’s role in the financial crash

The unholy intersection of subprime lending and evangelical promises of easy wealth

Topics: Religion, How the World Works, Mortgage Crisis, Wall Street,

“Did Christianity Cause the Crash?” is the kind of leading headline question ever-popular with bloggers desperate for readers to click through. (Yes, I plead guilty.) Whether the answer that pops in your head is yes or no, you’re impelled to read the story, if only to disagree viscerally or happily find your worst prejudices confirmed.

Hanna Rosin’s Atlantic article exploring the economic consequences of the so-called “prosperity gospel” is no mere blog post, but before reading it, I felt my own hackles rise in preliminary disagreement with the provocative lead-in. No one factor deserves all the blame for something as incredibly complicated as the global economic crash we just lived through. Everyone has their own favorite villain — the Community Reinvestment Act, Fannie Mae and Freddie Mac, China, the repeal of Glass-Steagal, the Commodity Futures Modernization Act, Goldman Sachs self-dealing, the conflict of interest inherent in how credit rating agencies work, the originate-to-distribute model of mortgage loan securitization, bad computer models, mismatched incentives, Wall Street executive greed, government leadership failure, the list goes on and on. The story of the crash is how all these different factors interlocked, reinforced each other, and blew up.

So sure, evangelical Christian preachers telling the members of their flock that all they have to do is trust in Jesus and they’ll be moving, lickety-split, right on up into that McMansion on the hill, played some part in encouraging a blithe American sense of entitlement, a confidence that riches should be our earthly reward just for being born again. But it is by no means the whole story, and in a perverse way lets regulators, Wall Street executives, and economists off the hook while partially blaming the lowest rung of the totem pole, the Jesus-dazzled Americans who took out loans that they couldn’t afford, for being the prime movers in creating an economic disaster, when in fact they were just as much victims as perpetrators.

That having been said, Rosin’s article is an excellent exploration of the amazing contradiction inherent in how evangelical Christianity in America, to borrow Andrew Sullivan’s formulation, “supports wealth while Jesus demanded total poverty.” There’s a lot of great reporting, particularly regarding the concrete intersections between the mortgage lending industry and the Jesus biz.

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Rosin’s chief narrative vehicle, Fernando Garay, the pastor of Casa del Padre in Charlottesville, Virginia, didn’t just preach the prosperity gospel, he prepared the loan papers too.

From 2001 to 2007, while he was building his church, Garay was also a loan officer at two different mortgage companies. He was hired explicitly to reach out to the city’s growing Latino community, and Latinos, as it happened, were disproportionately likely to take out the sort of risky loans that later led to so many foreclosures. To many of his parishioners, Garay was not just a spiritual adviser, but a financial one as well.

The demographic correlation between foreclosure hotspots and the newer “prosperity churches” is also interesting, as is the evidence that lenders executed a conscious strategy of reaching out to churches in order to target low-income, minority populations.

The idea of reaching out to churches took off quickly, Jacobson [a former top loan officer in Wells Fargo's subprime division] recalls. The branch managers figured pastors had a lot of influence with their parishioners and could give the loan officers credibility and new customers. Jacobson remembers a conference call where sales managers discussed the new strategy. The plan was to send officers to guest-speak at church-sponsored “wealth-building seminars” like the ones Bowler attended, and dazzle the participants with the possibility of a new house. They would tell pastors that for every person who took out a mortgage, $350 would be donated to the church, or to a charity of the parishioner’s choice. “They wouldn’t say, ‘Hey, Mr. Minister. We want to give your people a bunch of subprime loans,” Jacobson told me. “They would say, ‘Your congregants will be homeowners! They will be able to live the American dream!”

Sounds like high time that somebody escorted the money-changers out of the temple again, but that’s never really been the American way.

Andrew Leonard
Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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