Did you know that Bishops and Universities owned brothels?! Tighter lending practices? Its tight enough, there is no bubble

by Tim Broadway


 The whores of yore

 jacqueline murray

From Tuesday’s Globe and Mail

Published Tuesday, Mar. 27, 2012 2:00AM EDT

The Ontario Court of Appeal’s decision to legalize brothels will invite a wide range of response, from those heralding it as a positive step toward protecting sex-trade workers from violence and exploitation to those decrying the removal of the last barricade to having brothels on every corner.

So it might be helpful to consider how our ancestors approached prostitution. The legal rationales and the moral codes of medieval Europe suggest that the legalization of prostitution is far from innovative. In cities across Europe, legalized prostitution coexisted with both public decency and Christian morality throughout the Middle Ages.

Just who licensed these brothels might give us pause. In most communities, it was municipal authorities, who considered them to be a public service. Other owners were a little more surprising. For example, the “stews” of Southwark, now the South Bank of London, were owned and operated by the Bishop of Winchester.

In Montpellier, in the south of France, the University of Montpellier owned the local brothel and collected the revenue. (Could this be a new source of funding for our cash-strapped universities?)

How could such institutions – civic governments, the church, the university – own such apparently disreputable businesses? In part, the answer is that prostitution wasn’t so disreputable. A prostitute might commit a sin, but she didn’t break a law.

Prostitutes were classed as yet one more group of workers to be regulated, just as there were guilds to regulate merchants or cobblers. A prostitute was entitled to work and entitled to her wages. Consequently, there were laws against a john’s stiffing a working girl and not paying the agreed price. Equally, a prostitute could be fined for false advertising. If she used a lot of makeup or wore clothes that made her appear to be more beautiful or younger than she actually was, the courts would consider her to have committed commercial fraud.

Prostitutes were integrated into the community to a remarkable degree. When the cathedral of Notre Dame was being built in Paris in the early 13th century, city prostitutes banded together and raised money to provide a stained-glass window. It took a lot of debate among leaders of the day before the bishop refused the gift on the grounds that it was tainted by sin.

So why were prostitutes not only tolerated but integrated into the social fabric? Partly, there was a sense of compassion and forgiveness. After all, belief by some Christians held that Mary Magdalene had been a prostitute. If one of Jesus’s friends, the first to see him after the Resurrection, had been a prostitute, then anyone could repent and resume their place in respectable society.

Medieval people thought much like many people today: Prostitution is one of the few avenues of employment open to vulnerable women, the very young, the uneducated, those without family support. There were few job opportunities open to medieval women other than being a wife or a nun.

Widowed or orphaned women could find themselves destitute. A woman victimized by a violent husband, father or brother had nowhere to go. Perhaps, most sadly, a victim of rape might be considered unmarriageable and might be cast out by her family.

Because people recognized the close link between poverty and prostitution, there were many organizations devoted to helping women get off the streets. Sometimes, this meant a transition house where women could learn a craft, such as spinning. Other times, people donated money and other necessities to provide a dowry, so a woman could leave the sex trade and enter a legitimate marriage. This fact alone indicates how prostitutes were anything but ostracized from society at large.

Prostitution was thought to serve the needs of society. Medieval people were pragmatic and knew there would always be men who needed to buy or steal sex. Legalized and regulated prostitution gave them a place to go, rather than trolling the streets and harassing the town’s wives and daughters. Prostitution minimized the danger of wanton rape.

Even such eminent religious authorities as St. Augustine and Thomas Aquinas considered prostitution a “necessary evil.”

Legalized prostitution also meant that authorities could keep tabs on the women involved, making sure their own wives and daughters were not involved. The theory that kept the whole system going was that brothels were places where foreign men went and where foreign women worked. As naive as that sounds, medieval city councils clung to this rationalization.

Brothels flourished across medieval Europe. In 1348, during the Black Death, many of the brothels were shut down as frightened people denounced prostitutes as plague spreaders. But, soon enough, the brothels reopened, and new medical regulations saw the prostitutes receiving regular medical care.

There may be many benefits for our society and the women who work in the sex trade. With legalized brothels, perhaps, will come regulations leading to less street crime and fewer parks and laneways littered with dirty needles and used condoms. Women might be spared the violence of johns, the extortion of pimps and the numbing effects of addiction. Women and their children will benefit and so, arguably, will our communities.

 Isn’t it time we caught up with our medieval ancestors?

 Jacqueline Murray is a professor of history at the University of Guelph.


Bank regulator proposes heightened scrutiny of mortgage market
From Tuesday’s Globe and Mail
Published Monday, Mar. 19, 2012 3:39PM EDT

Canada’s financial regulator is proposing strict rules to tighten lending practices in the housing sector, a move that could cool the red-hot market after months of warnings about rising consumer debt.

The new rules would require banks to take a closer look at how much a property is worth before issuing a mortgage – and to know more about the monthly finances of borrowers before the money is doled out.

For the first time, the Office of the Superintendent of Financial Institutions has put together a framework on mortgage underwriting principles, which if approved would set extensive due-diligence requirements for lenders.

In particular, the regulator is issuing a warning about home-equity lines of credit, known as HELOCs, and asking banks to do more to ensure that they are thoroughly scrutinizing borrowers.

The move is part of an international effort to avoid another crisis like the subprime mortgage fiasco that clobbered the U.S. economy and major banks. But it comes as the Canadian banking sector is locked in a heated mortgage price war heading into the spring home-buying rush, with five-year fixed rates as low as 2.99 per cent. Lenders are pushing to gain market share while the market remains strong.

“Spring is our busiest season,” said Marcia Moffat, head of home-equity financing at Royal Bank of Canada, the country’s largest lender. “The competition tends to intensify as we approach the spring market, so that’s what you’re seeing.”

But policy makers and regulators are concerned about the debts consumers are taking on as a result of persistently low rates. The fear in Ottawa is that many borrowers will struggle to keep up their payments once rates rise substantially, posing a threat to banks and the economy. At the same time, economists say that Canada’s housing market – most notably in Toronto and Vancouver – is overpriced. If house prices fall at the same time as interest rates rise, borrowers could find themselves under water.

The draft rules, which OSFI put out for comment until May 1, are designed to ensure that banks are collecting detailed information about a borrower’s identity, background, and willingness and ability to pay their debts on time. The rules also deal with due diligence the banks should conduct on the value of properties. And OSFI is telling banks that they will have to disclose more information publicly about the risks contained in their mortgage portfolios.

OSFI’s guidelines lay out the details that it wants banks to check when considering a mortgage application. They include items such as home heating bills and other variable expenses.

The banks are still digesting the OSFI draft report, but Ms. Moffat said she is supportive of rigorous lending standards. “We have quite a disciplined credit adjudication approach. There’s always opportunity to tie things up in a bow, and perhaps that’s where this goes.”

Unlike the central bank and Finance Department, OSFI does not normally concern itself directly with consumer debt loads. The regulator’s job is to protect the safety of banks, not consumers. But it is warning that if consumers take on more debt than they can chew, banks will suffer.

While HELOCs can provide consumers with an alternative source of funds, “these products can also significantly add to consumer debt loads,” OSFI said.

Unlike mortgages, which must be paid by a certain date, HELOCs are revolving in nature and that can spur consumers to keep their debt balances higher for longer, and pose “greater risk of loss to lenders,” OSFI said. “As well, it can be easier for borrowers to conceal potential financial distress by drawing on their lines of credit to make timely mortgage payments and, consequently, present a challenge for lenders to adequately assess credit risk exposure.”

Home-equity lines of credit have risen sharply in recent decades. The growth rate of HELOCs spiked above 30 per cent in 2005, and was above 20 per cent in 2009 but has since levelled off to about five per cent, which is roughly in line with the rate at which mortgages are growing, said Toronto-Dominion Bank chief economist Craig Alexander.

Ottawa took steps to rein in the growth of HELOCs early last year, when Finance Minister Jim Flaherty made a number of rule changes in an effort to cool the mortgage market and prevent borrowers from getting in over their heads. One of the changes was that the government would no longer guarantee mortgage insurance on home equity lines of credit.

That rule change shifted the risk of home equity lines from taxpayers to banks, and it succeeded in encouraging more prudent lending. (Mortgage insurance, the vast majority of which is backed by the government, protects the bank in the event the homeowner defaults.) In its guidance Monday, OSFI told banks that “mortgage insurance should not be a substitute for sound underwriting practices.”

RBC’s Ms. Moffat said several items beyond the rate need to be looked at when a mortgage is issued, including the flexibility of the terms. “Ultimately it comes down to cash flow,” Ms. Moffat said. “You need to make sure that you’ve got enough flexibility that you can continue to make payments on your mortgage through the term.”