Thanks. This resurfaces regularly. My understanding is that CRA loans were never more than about 3% of the market. The slimeballs who were putting loans together were even cramming good credit risks into the sub-prime type stuff.
parsy, who would like to see Fuld, among others, doing the perp walk
"Subprime loans were the vehicle banks used to satisfy CRA compliance, and Clinton and his regulators encouraged their use. Before Clinton took office, subprimes were virtually unheard of. By the time Clinton left office, Sub-prime they made up more than 9% of the market for mortgage origination. Today they're 20%.
"It's instructive to go back to the early stages of the subprime market, which has essentially emerged out of the CRA," ex-Fed chief Alan Greenspan said in recent testimony on the roots of the crisis."
Every scenario of the cause starts with the creation of the sub-prime bubble in 1993 at HUD/CRA/Fannie Mae. It was the catalyst. Without that catalyst, the subsequent Wall St. Bubble would never have occurred. The Wall St. Bubble occurred because of Clinton/Rubin passing the Commodity Futures Modernization Act of 2000. This allowed unregulated leveraging (45 to 1). Bush spent all 8 years trying to regulate the dems bubbles before they exploded, and the dems voted against it all 8 years.