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AmSpecBlog
Community Reinvestment Second Act
In today's Forbes, Peter Schweizer has background on the Congressional Democrats' renewed interest in expanding the Community Reinvestment Act:
As we try to shake off the financial crisis, here's a bright idea. Take a law that has led to the writing of an enormous amount of bad mortgages and expand it. Then take enforcement away from bank examiners and give it to housing activists.
Sound like a poisonous cocktail? Well, it is what the Obama administration and Democrats are currently stirring up on Capitol Hill.
Although in my opinion the jury is still out on the CRA's precise effects on the housing market collapse, it is plausible that it played some significant role in our current economic disaster, and it is also certain that it is the plaything of the recently discredited ACORN. Those facts should give legislators pause, but pausing is not something that Congressional Democrats are good at doing.
Comments
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Pete| 10.5.09 @ 12:14PM
Plausible? Why so soft? Perhaps we could at least agree that this would be a BAD thing which would lead to BAD consequences, if not another total systemic collapse? Is there anything GOOD that could come of this?
Faffnir| 10.5.09 @ 12:29PM
I continue my call for 535 idiots on Capitol Hill to be given a .38 calibre attitude adjustment.
L. Ross| 10.5.09 @ 1:16PM
Faffnir:
Completely off topic (congressional idiots), I believe what you mean is a .357 caliber attitude adjustment. The true .38 caliber is an out of date round dating from the cowboy days. The .38 special is a modern round which actually has a bullet of .357 caliber. The cowboy round had a "heeled" bullet like a .22. The bullet had a tapered back end, like a .22 and the front end was the same diameter as the casing. All of this is some background on why a .357 can shoot both .357 rounds and .38 rounds.
FYI
scott| 10.5.09 @ 2:55PM
CRA directly caused, at the very least, 20% of fraudulent loans/defaulted mortgages. The indirect causes are also not exactly traceable, but CRA set the template for Freddie, Fannie to approve some 5 trillion in loans with a rubber stamp.
70% of mortgage applicants lied on the applications. You can blame probably all of the state govt's AND Freddie/Fannie for that as well. Banks had to compete with them on this level, but it was well understood there would be bailouts if everything flopped.
electgogo| 10.29.09 @ 10:47AM
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