Someone finally said it

[PhiGam]

http://www.pittsburghlive.com/x/pitt.../s_590330.html

The roots of today's mortgage-based financial crisis can be traced back to the Community Reinvestment Act (CRA), which Jimmy Carter signed in 1977. Seeking to address complaints from anti-poverty activists and housing advocates about banks allegedly discriminating against minority borrowers and "redlining" inner-city neighborhoods, the CRA decreed that banks had "an affirmative obligation" to meet the credit needs of victims of discrimination in borrowing.

To add a government stick to the process, the CRA decreed that federal banking regulators would consider how well banks were doing in meeting the goal of more multiculturalism in loaning when considering requests by banks to open new branches or to merge.

A good "CRA rating" was earned by way of increasing loans in poor neighborhoods. Conversely, lenders with low ratings could be fined.

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[RaggedyAnn]

Another interesting article from the New York Times in 1999.

http://query.nytimes.com/gst/fullpag...pagewanted=all

[Munchkin03]

Originally Posted by PhiGam

http://www.pittsburghlive.com/x/pitt.../s_590330.html

What do you mean, "finally"? I've been hearing this during the entire crisis.

We all know that this crisis was caused, in part, by how banks made it easier for people who had NO BUSINESS being homeowners to buy places far far beyond what they could afford. Just look at a list of neighborhoods affected the most by foreclosures...the demographics aren't a coincidence.

[CrackerBarrel]

Originally Posted by Munchkin03

What do you mean, "finally"? I've been hearing this during the entire crisis.

We all know that this crisis was caused, in part, by how banks made it easier for people who had NO BUSINESS being homeowners to buy places far far beyond what they could afford. Just look at a list of neighborhoods affected the most by foreclosures...the demographics aren't a coincidence.

I think he means that a news source is finally pointing out that banks didn't just decide "Hey, let's stop making sure people are going to be able to pay us back before we loan them money, it'll work out great." To point out that the reason banks made these kinds of loans is because they were coerced to is a big difference from everyone just printing the garbage Barney Frank has been spewing about "Look what the greedy banks that the Republicans deregulated got us into."

[Munchkin03]

Originally Posted by CrackerBarrel

I think he means that a news source is finally pointing out that banks didn't just decide "Hey, let's stop making sure people are going to be able to pay us back before we loan them money, it'll work out great." To point out that the reason banks made these kinds of loans is because they were coerced to is a big difference from everyone just printing the garbage Barney Frank has been spewing about "Look what the greedy banks that the Republicans deregulated got us into."

No, no, no. I absolutely know that the banks were encouraged to lend to riskier people, as a way to right previous wrongs, the CRA being the most glaringly obvious example. Again...I've been hearing this for at least the past year and a half.

[PhiGam]

Originally Posted by Munchkin03

No, no, no. I absolutely know that the banks were encouraged to lend to riskier people, as a way to right previous wrongs, the CRA being the most glaringly obvious example. Again...I've been hearing this for at least the past year and a half.

I personally had never heard anything of it from the media other than a brief sound bite from Fox.

[Munchkin03]

Originally Posted by PhiGam

I personally had never heard anything of it from the media other than a brief sound bite from Fox.

I don't watch much network news at all, unless I'm in an airport. Nothing against it, I'm just not home a lot to watch TV. I guess I just read a bunch of different papers with several viewpoints.

[MysticCat]

Originally Posted by CrackerBarrel

To point out that the reason banks made these kinds of loans is because they were coerced to is a big difference from everyone just printing the garbage Barney Frank has been spewing about "Look what the greedy banks that the Republicans deregulated got us into."

As long as we all remember that it doesn't have to be one or the other. Some garbage makes pretty good manure -- while the roots of the crisis include the CRA, "corporate greed" (for lack of a better term) and lax regulation can make some pretty good fertilizer.

[srmom]

Here is a great article regarding this issue - it's the most fair and even handed one I've read:

http://www.chicagotribune.com/news/c...6375633.column

[PhiGam]

RCP is very balanced but I must confess that I don't read the articles that I think I would dislike. I try to read at least one liberal article per day just to give me the other perspective but I read more conservative stuff. It's not that RCP doesn't allow me to, I choose to read 75% conservative articles.

[TonyB06]

http://www.blackamericaweb.com/site....weathersbee101


Commentary: Contrary to the Right-Wing Zealots’ Cries, Black People Did Not Create This Financial Crisis
Date: Wednesday, October 01, 2008
By: Tonyaa Weathersbee, BlackAmericaWeb.com

The lies and code just keep getting thicker.

....What I do know is that contrary to the rants of neo-conservative wingnuts like Ann Coulter and Michelle Malkin, poor black people didn’t create this crisis. But when it’s an election year in which a black Democrat may very well wind up in the White House, and when you’re in the business of trying to exploit racial fears rather than expose truths, the facts tend not to matter much. It’s the code that counts.

...First of all, this sub-prime crisis isn’t a crisis that can be blamed on any expectations of entitlement or on attempts at fairer lending to minorities. The Community Reinvestment Act, for example, which requires banks to make loans in low-income communities that they serve, was enacted in 1977. But since George W. Bush took office, CRA regulations have been substantially weakened.

Given the fact that some 30 years have passed from the time a law was made to force banks to lend in low-income communities in their market areas to when this sub-prime meltdown began, and it defies credulity to blame the CRA for all this.

What defies credulity even further is the fact that the CRA doesn’t even cover most of the institutions that issued the sub-prime loans. According to Michael Barr, a law professor who specializes in banking and finance at the University of Michigan, half of those loans were made by mortgage companies, which the CRA doesn’t cover and which are loosely regulated, and another 25 percent came from bank subsidiaries and affiliates, which the CRA only partly covers.

So this crisis isn’t rooted in some “affirmative action” conspiracy to force banks to make more loans to minorities who can’t afford them. It is rooted in the greed of those who saw the sub-prime market as a means to exploit all kinds of people, poor and minorities included.

[MysticCat]

Okay CrakerBarrel and PhiGam, y'all are getting me to check RCP out more than I have in the past.