Disagree. Wall Street was looking for a way to develop a large subprime mortgage market for investment purposes and the CRA didn’t cover them. CRA is small potatoes compared to what the gutting of Glass Steagall unleashed. The CRA had no regulatory power over the Wall Street firms that were not deposit takers, and Wall Street is where the huge money driving the subprime market came from.
What I am trying to say here is that the subprime market that the Wall Street firms were so interested in would not have existed without the CRA. The push of the CRA and the "ownership society" and "everyone should own a home" frrm Washington was the catalyst that created these new class of loans. Without that market intervention from the morons in DC, the housing crisis never comes about.
“What I am trying to say here is that the subprime market that the Wall Street firms were so interested in would not have existed without the CRA.”
A subprime lending market existed long before the CRA.
Do you recall the names Household Finance and Aames Home Loans? These were hard money lenders that made small household loans with high interest rates.
Wall Street firms had been eyeing that market but it was too small for them. They needed a larger potential market than small household loans.
What large potential market existed that could also bring a high interest rate? Some wizard at one WS firm that had been watching HFC and Aames realized that people with less than stellar credit had to pay a higher interest to borrow money. And there were a lot of them who might want to buy houses. And house loans involved big money, big enough to make it worth the attention of WS.
The book “Chain of Blame” has a chapter that describes how this unfolded in detail, gives you the name of the WS firm that first entered the subprime mortgage market. Oddly enough I think that they didn’t stick with it but all of their competition did in a huge way.