Posted on 10/09/2008 9:58:39 AM PDT by pissant
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.
Advertisement 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.
The Fed, for instance, warned banks that failure to comply with government guidelines regarding the delivery of "equal credit" could subject them to "civil liability for actual or punitive damages in individual or class actions, with liability for punitive damages being as much as $10,000 in individual actions and the lesser of $500,000 or 1 percent of the creditor's net worth in class actions."
However well-intentioned in terms of delivering "economic justice," this push for more government-directed social engineering produced a widespread weakening of long-established industry standards for credit worthiness.
Led by Congressional Democrats, this policy of replacing private and decentralized decision-making with a system of centrally-delivered rewards and punishments was basically a one-party effort. Republicans, it seems, were more aware of the unintended consequences that flow from government interference in the market.
As Investor's Business Daily recently put it, succinctly and correctly: "Over the past 30 years, Democrats, along with a handful of Republicans, have demonized lenders as racist and passed regulation after regulation pressuring them to make more loans to unqualified borrowers in the name of diversity."
The march toward the eventual financial meltdown picked up speed during the Clinton administration via an increased lowering of loan standards in order to expand minority borrowing.
The result was widely praised. "It's one of the hidden success stories of the Clinton era," wrote Ronald Brownstein in May 1999 in the Los Angeles Times. "In the great housing boom of the 1990s, black and Latino homeownership has surged to the highest level ever recorded. The number of African-Americans owning their own homes is now increasing nearly three times as fast as the number of whites; the number of Latino homeowners is growing nearly five times as fast as that of whites."
In 2000, Howard Husock reported in City Journal that the "Clinton Treasury Department's 1995 regulations made getting a satisfactory CRA rating much harder. There would be no more A's for effort. Only results — specific loans, specific levels of service — would count."
The "specific levels of service" referred to how well banks were responding to complaints, including complaints from advocacy groups that were in the business of complaining.
"By intervening — even just threatening to intervene — in the CRA review process, left-wing nonprofit groups have been able to gain control over eye-popping pools of bank capital, which they in turn parcel out to individual low-income mortgage seekers," reported Husock. "A radical group called ACORN Housing has a $760 million commitment from The Bank of New York."
ACORN stands for the Association of Community Organizations for Reform Now, a group Barack Obama has worked with in the past.
In addition to setting the stage for giving money for mortgage payouts to ACORN and other lending amateurs, CRA authorized those organizations to collect fees from the banks for their "marketing" of loans.
"The Senate Banking Committee has estimated that, as a result of CRA, $9.5 billion so far has gone to pay for services and salaries of the nonprofit groups involved," reported Husock.
There's big money, in short, in "nonprofit" activism — and upward mobility. A guy carries a sign advocating "Change" in front of a bank and the government turns him into a salaried protester, credit analyst and dispenser of mortgage money.
The changes came as radical 'housing rights' groups led by ACORN lobbied for such loans," reports Investor's Business Daily, regarding the Clinton era. "ACORN at the time was represented by a young public-interest lawyer in Chicago by the name of Barack Obama."
Ralph R. Reiland is an associate professor of economics at Robert Morris University in Pittsburgh. Send e-mail to him at rrreiland@aol.com
Great big reference PING
Traced, my butt. How about DIRECTLY ATTRITUTABLE!
ATTRITUTABLE= ATTRIBUTABLE.
.
McCain is still out there today spending all his time harping on the economy.
Get off the d*mned economy issue. State that Obama/Democrats/ACORN caused this meltdown. State McCain offered a proposal to avert the meltdown, state your solution and GET OFF IT.
Obama is counting on keeping this going to take the spotlight off his sordid past and dirty dealings!
McCain is losing this campaign because he refuses to fight Obama and his lies, and dirty tactics such as ACORN voter fraud. He’s just been rolling over (or bending over, I should say) and accepting the abuse heaped upon him- and expecially Sarah Palin.
The anemic attempts by the McCain camp to fight back within the last few days just ain’t gonna get it.
He should have been hitting Obama back hard months ago.
He needs to get out there every day and FIGHT BACK.
Email Republican headquarters/McCain. FReep ‘EM OUT!
Tell HIM WE’RE MAD AS H*LL AND WE’RE NOT GONNA TAKE IT ANY MORE! FReep HIM!
REMIND McCAIN THAT HE HAS AN OBLIGATION AS OUR CANDIDATE TO FIGHT BACK!
To h*ll with bipartisian BS!
To h*ll with PC!
To h*ll with ‘conducting a respectful campaign’as McCain has said, and vowed to do.
RESPECTFUL CAMPAIGNING WENT STRAIGHT OUT THE WINDOW WITH OBAMA’S NASTY, BRUTAL COMMENTS SUCH AS;
‘lipstick on a pig’ and ‘You can wrap AN OLD FISH in a piece of paper called change. It’s still going to stink after eight years.’
Take off the gloves, McCain!
Hit the Marxist/Muslim hard with Ayers, Acorn, Violation of Logan Act, abortion, 2nd admendment, Campaigning for Odinga!!
NOTHING is more important than waking America up to this Marxist/Muslim!! DO IT. EXPOSE HIM!
FReep ‘EM!!!!
MCCAIN/REPUBLICAN PARTY
Fax: 202-228-2862
Send a fax FREE: https://faxzero.com/
rickdavis@johnmccain.com, ameese@mccain08hq.com, anickel@mccain08hq.com,
johnmccain@gop.com, info@gop.com,
RNCommunications@gop.com, Chairman@gop.com, Political@gop.com
Meghan McCain http://mccainblogette.com/contact/
THE CONSERVATIVE ACTIVIST’S
(all the Republican movers and shakers)
GIANT E-MAIL LINKS PAGE!
http://www.conservativeusa.org/megalink.htm
FReep THE MSM!
SEND THEM DAMAGING INFO ON OBAMA. DEMAND THEY DO THEIR JOB AND INVESTIGATE.
ElRushbo@eibnet.com
me@glennbeck.com
Hannity@foxnews.com
FOX & Friends — Friends@foxnews.com
FOX News Live — Feedback@foxnews.com
FOX News Live w/ Jamie Colby — Jamie@foxnews.com
FOX News Live Weekend — Feedback@foxnews.com
FOX News Specials — Viewerservices@foxnews.com
FOX News Sunday — FNS@foxnews.com
FOX News Watch — Newswatch@foxnews.com
FOX Report w/ Shepard Smith — Foxreport@foxnews.com
Obama connection with ACORNhttp://article.nationalreview.com/?q=NDZiMjkwMDczZWI5ODdjOWYxZTIzZGIyNzEyMjE0ODI=
Obama goes to Kenya on the tax payer’s dollar to campaign for the murderous Islam-backed Odinga!
http://uk.youtube.com/watch?v=S8QcpdUtxNQ&feature=related
SHORT VERSION:
http://uk.youtube.com/watch?v=Q1P_P8lBCsE
Obama talks about Ayers giving him a job:
http://ca.youtube.com/watch?v=D-45A6I
BTTT
Not only the ROOTS but the whole damned tree is democrat party caused.. bark, wood, sap, branches, leaves the whole thing.. even the RINOs involved are stealth democrats..
Was hoping this story was being covered by a major media news unit. It is not, any mention of this will not come out until after the election. Our press is nothing more than a propaganda tool for the Democrats.
‘Yosemite Sam’ has “lit the fuse”, per Rush, speaking at a rally today..
“Obama took more money than anyone except Dodd from Freddy Mac and Fannie Mae” ..
altho he has not said the actual words of either Senator, yet.. who knows, he may name names eventually.
Bump.....
delivering "economic justice," this push for more government-directed social engineering produced a widespread weakening of long-established industry standards for credit worthiness
Government directed social engineering to deliver economic justice to non-credit worthy folks. Economic justice? And it didn't work? You don't say! Thanks, Jimmah! /sarc
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