Bill Clinton signed the bill

DESH.... WHO WAS THE NY FED CHAIR RESPONSIBLE FOR OVERSEEING THE RISK THE NY BANKS WERE TAKING?

WHY DO YOU KEEP AVOIDING ANSWERING THAT SIMPLE QUESTION DESH? DO FACTS SCARE YOU DESH?
 
There is very little doubt that the underlying cause of the current credit crisis was a housing bubble. But the collapse of the bubble would not have led to a worldwide recession and credit crisis if almost 40% of all U.S. mortgages–25 million loans–were not of the low quality known as subprime or Alt-A.

These loans were made to borrowers with blemished credit, or involved low or no down payments, negative amortization and limited documentation of income. The loans’ unprecedentedly high rates of default are what is driving down housing prices and weakening the financial system.

The low interest rates of the early 2000s may explain the growth of the housing bubble, but they don’t explain the poor quality of these mortgages. For that we have to look to the government’s distortion of the mortgage finance system through the Community Reinvestment Act and the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac .

In a recent meeting with the Council on Foreign Relations, Barney Frank–the chair of the House Financial Services Committee and a longtime supporter of Fannie and Freddie–admitted that it had been a mistake to force homeownership on people who could not afford it. Renting, he said, would have been preferable. Now he tells us.

Long-term pressure from Frank and his colleagues to expand home ownership connects government housing policies to both the housing bubble and the poor quality of the mortgages on which it is based. In 1992, Congress gave a new affordable housing “mission” to Fannie and Freddie, and authorized the Department of Housing and Urban Development to define its scope through regulations.

Shortly thereafter, Fannie Mae, under Chairman Jim Johnson, made its first “trillion-dollar commitment” to increase financing for affordable housing. What this meant for the quality of the mortgages that Fannie–and later Freddie–would buy has not become clear until now.

On a parallel track was the Community Reinvestment Act. New CRA regulations in 1995 required banks to demonstrate that they were making mortgage loans to underserved communities, which inevitably included borrowers whose credit standing did not qualify them for a conventional mortgage loan.

To meet this new requirement, insured banks–like the GSEs–had to reduce the quality of the mortgages they would make or acquire. As the enforcers of CRA, the regulators themselves were co-opted into this process, approving lending practices that they would otherwise have scorned. The erosion of traditional mortgage standards had begun.

Shortly after these new mandates went into effect, the nation’s homeownership rate–which had remained at about 64% since 1982–began to rise, increasing 3.3% from 64.2% in 1994 to 67.5% in 2000 under President Clinton, and an additional 1.7% during the Bush administration, before declining in 2007 to 67.8%. There is no reasonable explanation for this sudden spurt, other than a major change in the standards for granting a mortgage or a large increase in the amount of low-cost funding available for mortgages. The data suggest that it was both.

As might be expected, the market for subprime and Alt-A loans grew along with the rise in homeownership. Some have argued that unregulated groups such as mortgage brokers and bankers, working with subprime lenders such as Countrywide Financial, supplied both the easier credit and the lower loan standards, but the facts belie this.

From 1995 until 2004, subprime loans by the traditional subprime lenders like Countrywide averaged slightly more than 5% of all mortgages, far too few to account for the growth in either homeownership or the housing bubble. CRA loans, totaling 3% of originations, were also too few. Where, then, did all the low-quality loans come from?

From 1994 to 2003, Fannie and Freddie’s purchases of mortgages, as a percentage of all mortgage originations, increased from 37% to an all-time high of 57%, effectively cornering the conventional conforming market. With leverage ratios that averaged 75-to-1, and funds raised with implicit government backing, the GSEs were pouring money into the housing market. This in itself would have driven the housing bubble.

But it also appears that, perhaps as early as 1993, Fannie Mae began to offer easy financing terms and lowered its loan standards in order to meet congressionally mandated affordable housing goals and fulfill the company’s trillion-dollar commitment. For example, in each of the years 2000 and 2001, the first years for which data are available, 18% of Fannie’s originations–totaling $157 billion–were loans with FICO scores of less than 660 (the federal regulators’ cut-off point for defining subprime loans). There is no equivalent data available for Freddie, but it is likely that its purchases were proportionately the same, amounting to an estimated $120 billion.

These sums would have swamped originations by the traditional subprime lenders, which probably totaled $119 billion in these two years. Data for Alt-A loans before 2005 are unavailable, but the fact that that Fannie and Freddie now hold 60% of all outstanding Alt-A loans provides a strong indication of the purchases they were making for many earlier years.

The GSE’s purchases of all mortgages slowed in 2004, as they worked to overcome their accounting scandals, but in late 2004 they returned to the market with a vengeance. Late that year, their chairmen were telling meetings of mortgage originators that the GSEs were eager to purchase subprime and other nonprime loans.

This set off a frenzy of subprime and Alt-A mortgage origination, in which–as incredible as it seems–Fannie and Freddie were competing with Wall Street and one another for low-quality loans. Even when they were not the purchasers, the GSEs were Wall Street’s biggest customers, often buying the AAA tranches of subprime and Alt-A pools that Wall Street put together. By 2007 they held $227 billion (one in six loans) in these nonprime pools, and approximately $1.6 trillion in low-quality loans altogether.

From 2005 through 2007, the GSEs purchased over $1 trillion in subprime and Alt-A loans, driving up the housing bubble and driving down mortgage quality. During these years, HUD’s regulations required that 55% of all GSE purchases be affordable, including 25% made to low- and very low-income borrowers. Housing bubbles are nothing new. We and other countries have had them before. The reason that the most recent bubble created a worldwide financial crisis is that it was inflated with low-quality loans required by government mandate. The fact that the same government must now come to the rescue is no reason for gratitude.





http://www.forbes.com/2009/02/13/housing-bubble-subprime-opinions-contributors_0216_peter_wallison_edward_pinto.html


Reality check: the Community Reinvestment Act NEVER FORCED BANKS TO MAKE BAD LOANS TO MINORITIES. That is a LIE that the right wing has been telling for years....YET TO DATE THEY CANNOT PRODUCE THE QUOTE FROM THE ACT THAT STATES WHAT THEY CLAIM IN NO UNCERTAIN TERMS.

Bottom line: CRA told the banks that the SAME loans they made to low income white folk had to be made to low income black & hispanic folk. So unless someone can PROVE that the banks were making bad loans to low income white folk all along, the lie of blaming the CRA for the financial crisis brought on by the corrupt banksters is laid to rest.

Yes, Clinton had no business signing away Glass - Stegall....but the obstructionist GOP sure as hell did their number to gut whatever effectiveness it had left.

A matter of fact and history, as Evince has pointed out numerous times.
 
Super does this shit all the time


he flat out just fucking lies right into the face of facts.

DESH.... WHO WAS THE NY FED CHAIR RESPONSIBLE FOR OVERSEEING THE RISK THE NY BANKS WERE TAKING?

WHY DO YOU KEEP AVOIDING ANSWERING THAT SIMPLE QUESTION DESH? DO FACTS SCARE YOU DESH?
 
Reality check: the Community Reinvestment Act NEVER FORCED BANKS TO MAKE BAD LOANS TO MINORITIES. That is a LIE that the right wing has been telling for years....YET TO DATE THEY CANNOT PRODUCE THE QUOTE FROM THE ACT THAT STATES WHAT THEY CLAIM IN NO UNCERTAIN TERMS.

Bottom line: CRA told the banks that the SAME loans they made to low income white folk had to be made to low income black & hispanic folk. So unless someone can PROVE that the banks were making bad loans to low income white folk all along, the lie of blaming the CRA for the financial crisis brought on by the corrupt banksters is laid to rest.

Yes, Clinton had no business signing away Glass - Stegall....but the obstructionist GOP sure as hell did their number to gut whatever effectiveness it had left.

A matter of fact and history, as Evince has pointed out numerous times.

http://www.businessinsider.com/the-cra-debate-a-users-guide-2009-6

The above is a good discussion of the CRA impact.
 
http://www.cnbc.com/id/37213748


hes a fucking con.

CNBC is jammed pack full of cons


where do you see his political affiliation?

If he was, why would he write this...

Contrary to my initial conclusion, the evidence is overwhelming that the CRA played a significant role in creating lax lending standards that fueled the housing bubble. Once I realized this, I had to abandon my suspicion that the anti-CRA case was a figment of the rhetoric of Republicans attempting to distract attention from their own role in the mortgage mess.

Why would he rip on Reps?

Why do you try to dismiss everything he stated on your presumption that he is a con (which appears incorrect)?

Why are you so scared to address the myriad of evidence he presents in that article?
 
The moonbattery from the left is incredible. Even with all the information available, they are perfectly willing to, or deliberately lying about, the causes to the mortgage bubble and subsequent economic disaster that resulted from it.

So once again, and in an effort to dispel the idiot Union myths out there and the anti-Capitalist conspiracy theories, here are the facts.

First off, Glass-Steagall was not repealed. Secondly, the CRAs were not the primary reason for the disaster, but partially responsible for them, particularly when Clinton lowered the capital gains tax on home sales. Then when you have a monetary policy that is basically giving money away and creating it out of thin air, you have a confluence of events that lead to predictable disaster which a few desperately tried to warn everyone about but which no one wanted to listen while they counted their money; here and abroad. Remember, this disaster was not unique to American investors and financial markets.

Glass-Steagall had little or nothing to do with this disaster. This disaster was the result of well-intentioned Liberal Democrat legislation and a Fed that lowered interest rates creating a cornucopia of credit to be tapped by greedy speculators and mortgage companies selling low barriers to

Here are a few articles that will dispel these moronic myths as well as explain what really happened:

Five Myths about Glass-Steagall
By Peter J. WallisonThursday, August 16, 2012
Filed under: Economic Policy

Myth 1: Glass-Steagall was repealed in 1999 by the Gramm-Leach-Bliley Act.

No. Glass-Steagall was never repealed.

Myth 2: The repeal of Glass-Steagall allowed banks to use taxpayer-insured funds for risky trading.

No. The portions of Glass-Steagall that remained in effect after 1999 prohibited insured banks from underwriting or dealing in securities.

Myth 3: In the financial crisis, banks got into trouble by trading “risky” mortgage-backed securities (MBS).

No. Insured banks got into trouble in the financial crisis by buying and holding MBS backed by subprime and other low-quality mortgages, not from trading these instruments.

Myth 4: The repeal of Glass-Steagall allowed bank holding companies and bank-affiliated investment banks to use insured funds for risky trading.

Very unlikely. The 1999 change in Glass-Steagall allowed insured banks to be affiliated with investment banks, which could indeed take substantial risks in underwriting, dealing, and trading securities of all types.

Myth 5: By allowing insured banks to affiliate with risk-taking investment banks, the 1999 change in Glass-Steagall caused losses to the banks that contributed to the financial crisis.

No. As noted above, insured banks suffered losses in the financial crisis by making bad loans—that is, buying and holding MBS based on subprime and other low-quality mortgages.

http://american.com/archive/2012/august/five-myths-about-glass-steagall

What really caused the Mortgage market implosion, a great article that explains it in laymans terms for the loony moonbats of the left:


Would Glass-Steagal Have Prevented the Mortgage Crisis?
Guest Authors / January 20, 2013

by James Hanley
An Essay in Three Parts. Egregiously long, and about financial stuff, so read at your own risk.

.................

I: Origins of the Mortgage Crisis
In my considered opinion, the mortgage crisis was the consequence of the interaction of several government policies. I find most people want a single-policy argument, whether it’s conservatives blaming the Community Reinvestment Act or liberals blaming the repeal of Glass-Steagall. People seem not to like thinking about the interactions of policies, but policy is much like chemistry, the mixture of multiple policies, like the mixture of multiple chemicals, can have undesired effects.

............

First is the federal government’s increased pressure on banks to make mortgages available to low income borrowers, beginning in the mid 1990s. This was a renewed emphasis on the Community Reinvestment Act, or CRA. Banks that did not provide sufficient numbers of loans in poorer neighborhoods risked being charged with redlining. The problem was that one of the reasons (when it wasn’t simple racism) for banks to not make loans to poorer people is because poor people often just don’t qualify–they’re not good credit risks. One of the government’s demands was that banks change their standards, as explained by the Boston branch of the Federal Reserve.


[Unintentional discrimination may be observed when a lender’s underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants.]

But the emphasis on new loan methods to meet the needs of subprime borrowers did create a new precedent, making subprime loans more normal, more of a standard business practice than–as it more commonly was in the past–a practice to be avoided.

By itself that would not have caused the mortgage crisis. There’s just not enough effect on the mortgage market. But this mid to late 1990s push for more subprime lending was followed by the Federal Reserve’s easy money policy in the early 2000s, as it tried to stimulate the economy out of recession. At the beginning of 2001 the Federal Funds rate was 6.5%. By 2003 it was at 1%. Mortgage interest rates fell from about 7% for a 30 year fixed-rate mortgage to about 5.9%. That doesn’t seem like so much, but more importantly 1 year adjustable rate mortgages (ARMs) fell from 6.7% to 3.75%.


.................

The third policy was the Clinton-era decrease in the capital gains tax on homes that were owner-occupied for two years. Any time government policies change the rate of return on an investment they change investors’ strategies, and by reducing the capital gains tax on homes, but not for other investments, some amount of investment was shifted to home ownership, increasingly so as the bubble grew, making the returns from short-term home ownership even more lucrative. In fact a person could get a 3 year ARM, live in the house for 2 years, then sell it at the increased price and never have to worry about refinancing. Nobel Prize winning economist Vernon Smith was particularly harsh in his criticism of this policy, crediting the capital gains reduction with

[“fueling the mother of all housing bubbles…enabling so many of us [to buy] second or third homes, and homes before construction began, which we then sold to someone else who dreamed of riches from owning homes long enough to sell to another fool.]

...............

But here’s the problem. When a whole bunch of mortgages–thousands upon thousands–are pooled together, the purchaser of the security can’t evaluate each of them individually to make a really sound analysis of the pool’s overall value, so they’re bought as much or more on faith as on any actual knowledge about their value. The advantage of buying an MBS is that the risk of any one mortgage defaulting is mitigated by the number of mortgages in the pool–if a few go unpaid, that loss is overwhelmed by the overwhelming majority that do get paid. But that only works if the great majority of the mortgages are sound. If too many go into default, there’s not enough cash flow to cover the obligations of the security; the issuer of the security defaults, and the purchaser of the security loses their investment. But nobody can actually see into the mortgage pools, so nobody really knows how sound they are–how many of those mortgages will avoid default. So you rely on proxy measures, and when all around the investment world you see pools that keep paying, it’s natural to assume the pools your securities are backed by will keep paying off, too.

Then it all went south because too many mortgages went into default all at once. The housing bubble couldn’t keep going forever, particularly when the Fed tightened the money supply by raising interest rates. This created havoc with adjustable rate mortgages in particular, as I showed above, because you can’t refinance an ARM on a house that hasn’t increased in value. That’s when people lose their homes, and that’s when financial companies lose their portfolios.


http://ordinary-gentlemen.com/blog/2013/01/20/would-glass-steagal-have-prevented-the-mortgage-crisis

Another great article on the causes:

The Subprime Mortgage Market Collapse: A Primer on the Causes and Possible Solutions
By Ronald D. Utt, Ph.D.


http://www.heritage.org/research/re...a-primer-on-the-causes-and-possible-solutions

More:

What Caused the Financial Crisis
By Richard W. Rahn

This article appeared in The Washington Times on November 16, 2010.

Mr. Wallison concludes his argument: “What we know is that almost 50 percent of all mortgages outstanding in the United States in 2008 were subprime or otherwise deficient and high-risk loans. The fact that two-thirds of these mortgages were on the balance sheets of government agencies, or firms required to buy them by government regulations, is irrefutable evidence that the government’s housing policies were responsible for most of the weak mortgages that became delinquent and defaulted in unprecedented numbers when the housing bubble collapsed.” The tragedy is that the financial crisis continues because Congress misdiagnosed the problem and came up with a 2,000-page “solution” that will only make matters worse.


http://www.cato.org/publications/commentary/what-caused-financial-crisis

The bottom line; it had nothing to do with Bush or Glass-Steagall.

READ; BECOME INFORMED...instead of mind numbed leftist robots parroting the idiot talking points of leftist Marxist unions and the DNC.
 
Last edited:
Reality check: the Community Reinvestment Act NEVER FORCED BANKS TO MAKE BAD LOANS TO MINORITIES. That is a LIE that the right wing has been telling for years....YET TO DATE THEY CANNOT PRODUCE THE QUOTE FROM THE ACT THAT STATES WHAT THEY CLAIM IN NO UNCERTAIN TERMS.

Bottom line: CRA told the banks that the SAME loans they made to low income white folk had to be made to low income black & hispanic folk. So unless someone can PROVE that the banks were making bad loans to low income white folk all along, the lie of blaming the CRA for the financial crisis brought on by the corrupt banksters is laid to rest.

Yes, Clinton had no business signing away Glass - Stegall....but the obstructionist GOP sure as hell did their number to gut whatever effectiveness it had left.

A matter of fact and history, as Evince has pointed out numerous times.

Fascinating; you claim your post is a reality check while containing very little reality. CRA's were not the cause, they were the effect that contributed to the cause; read the above post and become informed.
 
Quote Originally Posted by Taichiliberal View Post
Reality check: the Community Reinvestment Act NEVER FORCED BANKS TO MAKE BAD LOANS TO MINORITIES. That is a LIE that the right wing has been telling for years....YET TO DATE THEY CANNOT PRODUCE THE QUOTE FROM THE ACT THAT STATES WHAT THEY CLAIM IN NO UNCERTAIN TERMS.

Bottom line: CRA told the banks that the SAME loans they made to low income white folk had to be made to low income black & hispanic folk. So unless someone can PROVE that the banks were making bad loans to low income white folk all along, the lie of blaming the CRA for the financial crisis brought on by the corrupt banksters is laid to rest.

Yes, Clinton had no business signing away Glass - Stegall....but the obstructionist GOP sure as hell did their number to gut whatever effectiveness it had left.

A matter of fact and history, as Evince has pointed out numerous times.



Fascinating; you claim your post is a reality check while containing very little reality. CRA's were not the cause, they were the effect that contributed to the cause; read the above post and become informed.

Your problem is that you again and again substitute your supposition and conjecture for reality. NOTHING in your post above points to the actual language in the Act itself that "forced" bankers to perform the chicanery they did. All they had to do was make the SAME low income loans available to minorities that they were doing so for whites. Period.

That the bankers CHOSE to make bad loans to easily get off the hook, then bundle those bad loans with good ones and put them on the national/international market to sell has NOTHING to do with the CRA...but EVERYTHING to do with the dishonesty and prejudice of the bankers.

What's fascinating is how YOU keep repeating mantras that IGNORE key facts, and how when pressed you cannot meet a simple burden of proof to support your claim. So now you'll just ignore what I say here, repeat your flawed litany, and remain a proud parrot for the very people that screw YOU over time and again. Carry on.
 
Your problem is that you again and again substitute your supposition and conjecture for reality. NOTHING in your post above points to the actual language in the Act itself that "forced" bankers to perform the chicanery they did. All they had to do was make the SAME low income loans available to minorities that they were doing so for whites. Period.

That the bankers CHOSE to make bad loans to easily get off the hook, then bundle those bad loans with good ones and put them on the national/international market to sell has NOTHING to do with the CRA...but EVERYTHING to do with the dishonesty and prejudice of the bankers.

What's fascinating is how YOU keep repeating mantras that IGNORE key facts, and how when pressed you cannot meet a simple burden of proof to support your claim. So now you'll just ignore what I say here, repeat your flawed litany, and remain a proud parrot for the very people that screw YOU over time and again. Carry on.

I see reading and comprehending are not your forte'. You'd rather continue your empty headed parroting of laughably stupid DNC talking points.

Like I said; read the document I posted above and become informed; or don't read and continue bleating like an uninformed dipshit.
 
Reality check: the Community Reinvestment Act NEVER FORCED BANKS TO MAKE BAD LOANS TO MINORITIES. That is a LIE that the right wing has been telling for years....YET TO DATE THEY CANNOT PRODUCE THE QUOTE FROM THE ACT THAT STATES WHAT THEY CLAIM IN NO UNCERTAIN TERMS.

Bottom line: CRA told the banks that the SAME loans they made to low income white folk had to be made to low income black & hispanic folk. So unless someone can PROVE that the banks were making bad loans to low income white folk all along, the lie of blaming the CRA for the financial crisis brought on by the corrupt banksters is laid to rest.

Yes, Clinton had no business signing away Glass - Stegall....but the obstructionist GOP sure as hell did their number to gut whatever effectiveness it had left.

A matter of fact and history, as Evince has pointed out numerous times.

Guess these guys don't have a problem with redlining, no surprise there.
 
Originally Posted by Taichiliberal View Post
Reality check: the Community Reinvestment Act NEVER FORCED BANKS TO MAKE BAD LOANS TO MINORITIES. That is a LIE that the right wing has been telling for years....YET TO DATE THEY CANNOT PRODUCE THE QUOTE FROM THE ACT THAT STATES WHAT THEY CLAIM IN NO UNCERTAIN TERMS.

Bottom line: CRA told the banks that the SAME loans they made to low income white folk had to be made to low income black & hispanic folk. So unless someone can PROVE that the banks were making bad loans to low income white folk all along, the lie of blaming the CRA for the financial crisis brought on by the corrupt banksters is laid to rest.

Yes, Clinton had no business signing away Glass - Stegall....but the obstructionist GOP sure as hell did their number to gut whatever effectiveness it had left.

A matter of fact and history, as Evince has pointed out numerous times.



http://www.businessinsider.com/the-cra-debate-a-users-guide-2009-6

The above is a good discussion of the CRA impact.


But it's the same fatal flaw.....that banks were "coerced" into making bad loans via the CRA.

BULLSHIT!

Everyone who keeps reiterating this dreck in various forms CANNOT produce the line or paragraph from the CRA that says loan standards have to be lowered to accommodate minority loans! The edict was that minorities were to receive the SAME level of scrutiny and accommodation that whites did!

That the banks CHOSE to inflate their records with bad loans and then hide the fact by mixing those bad loans with good ones in packages they sold on the market has NOTHING to do with the CRA.
 
Quote Originally Posted by Taichiliberal View Post
Your problem is that you again and again substitute your supposition and conjecture for reality. NOTHING in your post above points to the actual language in the Act itself that "forced" bankers to perform the chicanery they did. All they had to do was make the SAME low income loans available to minorities that they were doing so for whites. Period.

That the bankers CHOSE to make bad loans to easily get off the hook, then bundle those bad loans with good ones and put them on the national/international market to sell has NOTHING to do with the CRA...but EVERYTHING to do with the dishonesty and prejudice of the bankers.

What's fascinating is how YOU keep repeating mantras that IGNORE key facts, and how when pressed you cannot meet a simple burden of proof to support your claim. So now you'll just ignore what I say here, repeat your flawed litany, and remain a proud parrot for the very people that screw YOU over time and again. Carry on.

I see reading and comprehending are not your forte'. You'd rather continue your empty headed parroting of laughably stupid DNC talking points.

Like I said; read the document I posted above and become informed; or don't read and continue bleating like an uninformed dipshit.

YOU don't even understand the history behind what YOU are reading, do ya bunky?

Here's your homework assignment. READ the CRA of 1977 and then grace us all with the paragraph that states in no uncertain terms that banks MUST make loans to minorities REGARDLESS OF THE RISK OF DEFAULT.

We'll be waiting. In the meantime, here's a primer for you:



The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”


http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html
 
YOU don't even understand the history behind what YOU are reading, do ya bunky?

Here's your homework assignment. READ the CRA of 1977 and then grace us all with the paragraph that states in no uncertain terms that banks MUST make loans to minorities REGARDLESS OF THE RISK OF DEFAULT.

We'll be waiting. In the meantime, here's a primer for you:



The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”


http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html


You obviously don't remember Democrats calling those banks, 'racist banks', that red lined minorities and others without sufficient income or credit references, from getting home loans do you ?.....Throughout most of the 90's it was a regular thing.....the msm enjoyed giving bad press to those special banks the dems
picked out to ruin.....of course when th banks did subcome to the negative press they were then attacked a 'preditory lenders'.....damned when ya do and damned when you don't....
 
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