The trouble is that investment banks have shareholders who get hurt when those banks shoot craps with other people's money, and obviously those banks should not have absolute freedom to be irresponsible.
Yes, I blame the government for pressuring lenders to make unsound mortgage loans based on race, etc., and both parties are guilty. But how much did the Community Reinvestment Act contribute to the mortgage mess? There seem to be significant delenquencies among higher and lower icome mortgages too.
Rates by Relative Income Zip Code1 [footnote 1. Source LoanPerformance. End footnote.]
Delinquency Rate as of August, 20082 [Footnote 2. For mortgages originated between January, 2006 and April, 2008. End footnote.]
Lower-Income Zip Code Subprime: 25.0. Alt-A: 16.1. Total: 21.5.
Middle-Income Zip Code Subprime: 21.3. Alt-A: 12.9. Total: 17.7.
Higher-Income Zip Code Subprime: 19.5. Alt-A: 10.9. Total: 14.5.
Here is a claim by FED governor Duke that the Community Reinvestment Act did not contribute significantly to the mortgage crisis:
Why do lenders have to report race, gender, census tract, amount of loan and income, but not credit score data?
Because banking regulations are drawn up by liberals. Liberals who use guilt and fear of being called names like racist or unfair to women etc...
And the average banker know the MSM is the "enforcer" for those same liberals who make the regulations - the big boys WILL be called in to expose the banker publicly - "60 Minutes" etc. is calling.... )
And reporting credit scores would show banks were trying to be fair all along and were pressured by liberals to make awful loans.
People are afraid of being called racist, unfair to women or the poor - and that charge can be made as long as FICO scores ( a true "level playing field" number ) are kept OUT of the mix.