CRA at Fault
So, it was over regulation that caused the fiscal crises. That certainly blows a hole in the “we need more regulation” point of view.
The CRA coerces banks into making loans based on political correctness, and little else, to people who can’t affordt them. Enforced like never before byt he Clinton administration, the retulation destoyed credit standards across the mortgage industry, created the subprime market, and caused the housing bubble that has now burst and left us with the worst housing and banking crises since the Great Depression.
The CRA should be abolished, along with the government-sponsored enterprises that fueled the secondary market for subprimes — under pressure from Clinton, who ordered HUD to set quotas for “affirmative action” lending at Fannie Mae and Freddie Mac.
But powerful Democrats in Washington want to protect the act — along with Fannie and Freddie — and spin the subprime scandal as the result of too little regulation, not too much.
It goes on, in much more detail. Who are these people in Washington? Seriously, with leaders like this…
“Repealing or weakening the CRA would be a mistake,” warns Senate Banking Committee Chairman Chris Dodd, D-Conn., who argues that the CRA should be strengthened.
Dodd, the top recipient of Fannie donations and himself a beneficiary of a sweetheart mortgage brokered by a subprime lender, recently invited one of Clinton’s top enforcers of the CRA to testify.
