If the CRA was to be the cause of the housing crisis, how come neither Ronald Reagan, GHW Bush, nor GW Bush sought to eliminate the CRA?
The answer is that the CRA contributed very little to the housing crisis. The vast majority of bad loans were funded by investment banks and hedge funds, none of which were covered by the CRA.
Too many conservatives are eager to glom onto a politically convenient but factually deficient myth about the causes of the financial crisis.
The private financial sector spent most of Clinton’s years lobbying for repeal of the Glass Steagall Act and the exemption of derivatives from any sort of regulation. And they got it.
It is not a coincidence that less than 10 years after passage of the Gramm-Leach-Bliley Act and the The Commodity Futures Modernization Act of 2000 that the United States experienced another financial crisis of the sort that the Glass Steagall Act had headed off for nearly 70 years.
“If the CRA was to be the cause of the housing crisis, how come neither Ronald Reagan, GHW Bush, nor GW Bush sought to eliminate the CRA?”
Unfortunately because they were probably afraid of being branded “racists”.
“The answer is that the CRA contributed very little to the housing crisis. The vast majority of bad loans were funded by investment banks and hedge funds, none of which were covered by the CRA.”
You mean like WAMU or Countrywide?
Yes, bankers, like you and me are greedy, but I would venture to guess that the vast majority of them are not stupid. If you were a banker would you make a loan that you knew there was a 90% chance that it wouldn’t be repaid?
Please tell me what could have caused these “greedy’ bankers to lose their minds and make loans to people with no proof of income and nothing down? Would you as a banker have done that?
Also please tell me, who bought most of the securitized loans?
Also please tell me, why did the top rating agencies give AAA ratings to these securitized subprime loans?
You use a lot of handwaving in your arguments, but I didn’t see a single factual rebuttal of the article that I referenced. Please reread the article and provide facts to rebut each of his points.