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Just throwing this out, hoping it gets to someone that may find a use for it. (maybe someone on the Hill in the progressive caucus?)

But the ACA just had its what?  33rd repeal vote?

I know Michelle Bachmann, for one, at least, has blamed the economic crisis on the Community Reinvestment Act.  (I've also heard it on radio programs over and over again, but can't attach any specific names right now).  Anyway, the story goes that the big, bad gub'mint forced poor, powerless bankers into making loans to people that were not qualified and never had any ability to pay up.

The truth is (IIRC), the CRA banned red-lining.  Banks were forced to make loans to people that were qualified, regardless of where the house was located.  Essentially, what had been happening is that banks were denying loans to people based on race.  They didn't want to put brown people in white neighborhoods because they didn't want the value of their other investments in that neighborhood to decrease.  (Dontchya know, a black dude moves in next to you, and instantly your property value declines )

Anyway, so far as I know, nobody has ever produced a single banker that has pointed to the CRA, an unqualified loan recipient that defaulted, and nexus between the two such that the banker was innocent.  Not one.

Not a single one.

Not one.


Republicans keep telling me that the gub'mint regulations in the CRA crashed the economy.  What we need is to get the gub'mint off the backs of the jaahhhhb-kreataahhhs.

So long as it is an article of faith that the CRA caused the greatest loss of wealth in history, why haven't any Republicans offered legislation to repeal it?  Why hasn't Boehner brought THAT up for repeal 33 times?

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Comment Preferences

  •  Because they couldn't attach a rider (2+ / 0-)
    Recommended by:
    MKSinSA, Sue B

    banning the aca on that one, so, it's not important enough.

    Lo que separa la civilizacion de la anarquia son solo siete comidas.

    by psilocynic on Thu Jul 12, 2012 at 07:57:15 AM PDT

  •  too busy repealing ObamaCare (0+ / 0-)

    What we call god is merely a living creature with superior technology & understanding. If their fragile egos demand prayer, they lose that superiority.

    by agnostic on Thu Jul 12, 2012 at 07:59:32 AM PDT

  •  Could it be that it would have helped Obama...? (0+ / 0-)
  •  This (0+ / 0-)

    Is actually a great "dog not barking" observation.  I will use this in rebutting future right wing twits who blame the CRA for the housing crisis.

    I sometimes bring up the 2002-2006 period of Republican congressional/presidential control and ask them why if the CRA was such a problem, the Republicans didn't amend/repeal it, and I'm usually told because Barney Frank somehow stopped it (despite being a House member in the minority with less power than the VP's "warm bucket of piss" to stop anything).

    You'd think for the act that was supposedly the cause of all this misery, they could at least have held a symbolic vote repealing or amending it.

    •  Goes to show how ignorant they are. (1+ / 0-)
      Recommended by:

      The "Barney Frank" argument only goes to a bill attempting to transfer oversight of Fannie Mae to the executive branch, and even then it's bs.  Frank was a minority member on a Republican-majority committee.  In the House.  In other words, there was no way for a minority Congressman to "block" the bill.  The only way it didn't pass was that the Republicans didn't make it a priority.  In any case, the bill had jack to do with the CRA.

      I spent a brief time doing mortgage foreclosure defense.  During that time, I saw hundreds of mortgages in Palm Beach County, ground zero for the crisis (or at least one of them).  I did not see a single CRA mortgage during that time.  Not a single one.  And Palm Beach County has plenty of "underserved" communities.  It ain't all mansions.

  •  And the CRA led to credit default swaps too! (1+ / 0-)
    Recommended by:

    And the New Deal caused the Depression.


  •  I deal with CRA daily (3+ / 0-)
    Recommended by:
    Scientician, FG, RJDixon74135

    the regulation does not tell you to make bad loans. In combination with Fair Lending it makes sure that banks are not discriminating against LMI or Minority individuals. Regulators take red-lining seriously.

    Blaming CRA is all smoke and mirrors.

    The Spice must Flow!

    by Texdude50 on Thu Jul 12, 2012 at 08:31:36 AM PDT

    •  Worse. Blaming the CRA is just another dog whistle (2+ / 0-)
      Recommended by:
      Sue B, Texdude50

      It's a code way to say, "those people" trying to get more "free stuff" from the government caused the economy to crash. Nothing, NOTHING, could be further from the truth.

      Eliminate tax breaks that stimulate the offshoring of jobs.

      by RJDixon74135 on Thu Jul 12, 2012 at 09:53:28 AM PDT

      [ Parent ]

      •  But CRA cramped the free enterprise private sector (0+ / 0-)

        by providing a raft of sound loans that were good then and are good now. Not all the bs stuff that was sold in red lined communities with the floating rates, balloons, and negative amortization and the like, because they were 'cheaper' although the commissions for selling the junk were higher than straight thirty year Fannie Mae compliant loans that CRA banks issued, with credit checks that were worth something, and people getting loans who could demonstrate the could pay for them. . All that is important to Rs is the free market which created and profited from that stuff, since the people who were inside the redline were not entitled to better.

  •  What a load of hooey (1+ / 0-)
    Recommended by:

    The CRA is a fine law.  It said that a bank can't take deposits in from school teachers and plumbers and other average folk who live in the less affluent end of town but only make loans to all those rich would be land developers and McMansion buyers on the rich side of town.  It says you have to lend a small percentage of your depositor's money back to...your depositors.

    Always remind the wingnuts that the CRA applies to BANKs.  Remember the names of the sub-prime lenders you've heard about, lenders like Countrywide and New Century.  Guess what - those weren't banks - they weren't subject to the CRA. They were mortgage companies. The CRA did not apply to them.

    All those crap mortgage companies sprang up and starting loaning money like crazy for only one reason, someone came up with the idea that if you bundled enough loans together you could sell slices of the bundle as a AAA rated investment, and that oddly, mathematically, it didn't really matter how crappy the underlying loans were - if you simply bundled enough of  them together they became gold plated.  They even had a cute little equation to prove it and quants to crunch the numbers.   Bundling the loans apparently made risk just up and disappear.  The only thing standing in the way were regulations.  If you want to know what  piece of legislation responsible for this mess - read about the Commodities Futures Modernization Act and Phil Gramm's role in all of this.

    The WallStreeters who bundled the loans could make a ton for bundling and the Wallstreeters who sold slices of the bundles could make a ton in commissions selling the slices.  They just needed a unending source of loans to bundle to get the gravy train rolling.  Once lenders, banks, mortgage companies, credit card companies, all lenders everywhere, realized they could make loans, no matter how crappy and sell them for the same as if they were good loans, well let the crappy lending begin.  

    That's how we got in this mess.  It was entirely predictable.  Indeed it was predicted by some. And the CRA had nothing to do with it.

    Newt Gingrich: Believes marriage is between one man and a series of ever younger women. Wife #1 born ~ 1936, divorced when in her mid-40s...Wife #2 born ~1947, divorced when in her mid-40s...Wife #3 born ~1966.

    by trillian on Thu Jul 12, 2012 at 09:39:02 AM PDT

  •  The default rate on CRA loans is actually lower (1+ / 0-)
    Recommended by:

    than the rate of defaults on loans made by the big corporations (think Countrywide). See this Federal Reserve staff analysis:  Canner and Bhutta Memo to Federal Reserve (pdf)

    Eliminate tax breaks that stimulate the offshoring of jobs.

    by RJDixon74135 on Thu Jul 12, 2012 at 09:50:32 AM PDT

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