Not content with wrecking the housing industry by forcing
increased lending to those unable to pay back their mortgages,
the Left wants to give it another try. Fannie Mae and
Freddie Mac are still around, of course, begging for new
bail-outs as they try to reinflate the housing bubble. And
then there's the Community Reinvestment Act, which was used as a
form of financial affirmative action, forcing banks to provide
mortgages to people who did not meet normal lending
standards. Alas, more than a few couldn't pay back their
loans, leading to charges of ... predatory lending!
But the Left has learned nothing, and wants to expand the CRA to
every lending institution not yet covered. The results
would be predictable, alas. Another crisis to be blamed on
"unfettered" capitalism!
Reports Byron York:
A number of experts believe that aggressive enforcement of the
1970s-era Community Reinvestment Act contributed to the
mortgage meltdown, and thus to the greater financial crisis, by
requiring financial institutions to lend to unqualified
borrowers. Now, the Democratic majority in the House of
Representatives is responding to that situation by proposing to
expand the scope and power of the Community Reinvestment Act.
This morning House Financial Services Committee chairman Rep.
Barney Frank held a hearing on H.R. 1479, the
"Community Reinvestment Modernization Act of 2009." The
bill's purpose is "to close the wealth gap in the United
States" by increasing "home ownership and small business
ownership for low- and moderate-income borrowers and persons of
color." It would extend CRA's strict lending requirements to
non-bank institutions like credit unions, insurance companies,
and mortgage lenders. It would also make CRA more explicitly
race-based by requiring CRA standards to be applied to
minorities, regardless of income, going beyond earlier
requirements that applied solely to low- and moderate-income
areas.
Of course, the one thing that could end up missing from
the picture is ACORN, under fire for promoting prostitution and
tax evasion by those seeking the organization's counsel.
The CRA doesn't make much sense if ACORN isn't around to lead the
resulting financial shake-down.
