Required reading

[unixronin]

Still think Obama is a moderate?  Want to see what kind of change he might bring?  Read all about it here.  Among other things, it turns out the Great New Hope Of The Left was personally instrumental in priming the banking crisis we're facing right now, representing ACORN in the lobbying drive that forced the strengthening of the Community Reinvestment Act and started the whole subprime-mortgage ball rolling.

(Pointer from the esteemed radarrider)

Comments

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[skellington.livejournal.com]

H) The mortgage products that caused the problems, including interest only and option arm mortgages, were created entirely for rich people, with irregular income, or lots of investments. They were not created for the CRA programs at all.

So the CRA has existed for 30+ years, the changes to the CRA last happened over 10 years ago, (except for some recent Bush changes to further weaken reporting requirements), and nothing bad happened.

And none of the other proximate causes listed above were CRA related.

CRA is just a bank pet peeve, because it adds extra costs to track their compliance and to pay off "shakedowns" by community organizers if they don't meet their targets.

CRA is a republican pet peeve, because they consider it an affirmative action program. And because those community organizers tend to do things like register poor, democratic voters.

I have no idea if the CRA is a good or bad idea at this point. There is some evidence in the reported data, but it is not conclusive, that there is still racial (although perhaps not geographic) and income discrimination on both getting loans and the rate paid. But the situation *is* much better than the 70's and it might be interesting to track more data (i.e. credit quality, which is not currently tracked), and otherwise repeal the CRA and see if there's evidence for continued discrimination.

But the CRA isn't the cause of the credit crisis. #1 and #2 are probably Greenspan and the investment banks (enabled by the SEC.)