She was appalled at the attitudes and the gloating done by brokers and associates some 12 years ago when they had ripped off unsuspecting clients.
"One award was for who had the best bait and switch," Dunbar said, her voice increasing in anger at the memory.
Dick Dunbar was not forced to hit the bricks.
And Kathleen Dunbar says she is confident that the industry has cleaned itself up and will continue to police itself to the point that any regulation by the city is unwarranted.
"Yeah, you got some creeps in the business," the councilwoman said. "You got some creeps in politics. You got some creeps in newspapers. There are some bad people in every industry. But this industry has cleaned itself up. That's why it is pretty damn insulting to have a proposed ordinance before we sit down with the industry."
The "insult" came from Councilman Steve Leal, a Democrat, who is pushing for Tucson to adopt a law that is patterned after one that seeks to choke off predatory lending in Oakland, Calif., where Leal grew up.
Proliferation of payday loan and cash advance centers, noticeable on most street corners of the city, combined with questionable practices by some mortgage companies, prompted Leal to seek the law.
Leal, Dunbar said, is confusing high-interest loans made legitimately on high-risk borrowers with the payday loans.
But Leal said unscrupulous mortgage lenders take between $15 million and $20 million a year from working, frequently minority, families.
The figures come from an ACORN Foundation study, and Leal said that home foreclosures in Tucson have jumped up from 1,100 to 3,400 in six years.
Under his proposal, lenders would no longer be as able to prey on those who have fallen on hard times such as those with high medical bills who refinance their home only to be faced with high interest, hidden fees and penalties that they cannot possibly meet.
Lenders would no longer be able to charge for up-front credit insurance, would have to limit fees, no longer make loans to those who clearly won't be able to repay, no longer assess stiff back-end prepayment penalties, and no longer "flip" loans with repeated refinance loans that are loaded with fees.
After a bitter council discussion, the issue is now in the city's economic development subcommittee that includes Leal, Democratic Vice Mayor Shirley Scott and Democratic Councilman José Ibarra.
More than 20 people, including 10 lenders, attended the first session Monday. Getting a definition of predatory lending was as difficult as defining obscenity, which Justice Potter Stewart famously noted was elusive to define but that he knew it when it saw it.
Dunbar was furious that Leal proposed the legislation at the Aug. 4 council meeting, the lone session for the month, without talking to industry representatives. A former one-term member of the state House of Representatives, Dunbar said the matter is best suited to state law and state enforcement. She also said that Leal's action will dry up money for the very people--those who need affordable housing--he seeks to help.
Ken Scruggs of Household Finance pressed Leal Monday with the same question.
"It would be an abdication of my responsibility to the city," Leal said.
Pastor T. Grady Scott, of Grace Temple Missionary Baptist Church in the South Park neighborhood, told the group that legislation is required to keep people from both being preyed upon and from making bad decisions.
He spoke about a woman who took out a mortgage to finance a $5,000 shed. Hit with hard times, she ended up losing her home worth more than $50,000.
"Somebody made that loan," Scott said.
Predatory lending and Leal's attempt to drive it out of Tucson through ordinance have firmed up the wall dividing the council. That barrier, at times permeable with crossover votes from Democrat Carol West--or, less frequently, from Scott--is not entirely due to party on this issue. It just happens that the Republicans--Dunbar, Councilman Fred Ronstadt and Mayor Bob Walkup--have strong ties to the lending and banking business.
They are the type of ties that seem to shrink Tucson from a city of a half-million people to a town of 5,000. Dunbar's husband operates Select Mortgage, which, in addition to being a busy lender, is a Republican haven.
Ronstadt, meanwhile, is on the payroll of Compass Bank (though Compass isn't a player in the subprime market). He and his wife also scored with a nifty refinance from Select Mortgage, Pima County property records show.
Then there is Walkup, who said of predatory lending at the Aug. 4 council meeting: "I can't think of a more complicated issue."
Walkup's wife, Beth, is a consultant to small business and nonprofits and she is a founding investor and member of the board of directors of Commerce Bank of Arizona, which opened nearly two years ago.
It takes work to find that out.
While Walkup lists his wife's consulting business (which has no city business license) on his annual financial disclosures that are required by state and city laws, he omitted his wife's fiduciary and investment roles in the Commerce Bank.
Records from the Arizona Corporation Commission reveal her bank position.
Dunbar and Walkup have not been told by city legal advisers that they have conflicts of interests. The proposed ordinance and debate over it are broad enough to include whole the market and not just Select Mortgage or Commerce Bank. They don't specifically stand to gain or lose.
If Councilwoman Dunbar isn't raising enough of a complaint, Dick Dunbar has filed papers to tell the council to back off.
"It would not affect my business whatsoever," Dick Dunbar said. "But it's a stupid for the council to get involved in this. It is a federal and state issue and a matter of education."