h/t goeffb:
In short, the CRA is compelling banks to make trillions in loans to individuals who have poor credit and who often can’t or won’t make their payments.
Now comes Rep. Eddie Bernice Johnson, D-Texas, and 50 other co-sponsors (all Democrats) of H.R. 1479 the “Community Reinvestment Modernization Act of 2009,” who want to expand the CRA to include not just banks but also credit unions, insurance companies and mortgage lenders. Congressman Barney Frank*, chairman of the House Financial Services Committee, has supported the idea in the past. The SEIU and ACORN, along with a host of other activist groups, are also behind the effort.
President Obama has been a staunch supporter of the CRA throughout his public life. And his recently announced financial reforms would make the law even more onerous and guarantee an explosion in irresponsible lending. Obama wants to take enforcement of the CRA away from the Federal Reserve, the FDIC and other financial regulators who at least try to weigh bank safety and soundness when enforcing the law, and turn it over to a newly created Consumer Financial Protection Agency (CFPA). This agency’s core concerns would not be safety and soundness but, in the words of the Obama administration, “promoting access to financial services,” which is really code for forcing banks to lend to those who would not ordinarily qualify. Compliance would no longer be done by bank examiners but by what the administration calls “a group of examiners specially trained and certified in community development” (otherwise called community activists). The administration says, in its literature about the reforms, that “rigorous application of the Community Reinvestment should be a core function of the CFPA.”
Community Reinvestment, meet Arbitrary Democrat Standards. Standards, Reinvestment. Because it worked so very well the last time it was tried.
The topic sources to Peter Schweizer at Forbes, who notes
The White House and Congress want to expand a 30-year-old law–the Community Reinvestment Act–that helped to fuel the mortgage meltdown. What the CRA does, in effect, is compel banks to seek the permission of community activists to get regulatory approval for bank expansions and mergers.
Permission?
Any doubt that the left despises markets and, well, the disadvantaged who function within them should be dispelled by now. Because by wrecking how trade and markets work, they just perpetuated disadvantage into like forever, replacing it with dependence and servitude, calling it all community service, as in: subscribing dependency for life is a definite service to the community.
No word yet on just how brothels full of underage South American girls will be funded. So, write your Congressman!
More: h/t sdferr who points us to track records:
Thus, almost two-thirds of all the bad mortgages in our financial system, many of which are now defaulting at unprecedented rates, were bought by government agencies or required by government regulations.
*Barney Frank? Yes, that Barney Frank. More!
Comment by The Sanity Inspector on 10/16 @ 7:37 am #
In short, the CRA is compelling banks to make trillions in loans to individuals who have poor credit and who often can’t or won’t make their payments.
Yep, sounds like this is where we came in, last time this played. So long as liberals control the government, the government should control everybody else, in their “thinking.”
Comment by sdferr on 10/16 @ 7:39 am #
We might as well throw Peter Wallison’s faggot on the fire.
Comment by JHo on 10/16 @ 7:44 am #
Question: Why isn’t this patently offensive to the folks it’s aimed to “serve”? Is it because envy and greed — yes, greed, the hated Republican-only vice — have replaced fairness, principle, and working function?
Entire population centers are going off the financial grid now and are doing so in the professed, admitted name of failure. How? Because today they turn to their government — that destructive entity that by now works only by force of populist mandate and in defiance of natural order — to, in effect, acquisition for them.
52% of us, by the measure of the last election. Surely this must end well, as mobs with sticks usually do when they go shopping.
I think I’d be offended if my government identified me as a loser by class and/or race and insisted on treating me accordingly. Which if economic trajectory holds, surely they’re about to.
Comment by The Sanity Inspector on 10/16 @ 7:50 am #
JHo,
Not to invoke Godwin or anything, but there’s an observation that was made about the late Weimar Republic. They gratefully accepted the manacles, to stop their hands from trembling.
Comment by JHo on 10/16 @ 7:54 am #
We could blame capitalism, Sanity. While we all go get government jobs.
Pingback by Speaking of Bubbles . . . « POWIP on 10/16 @ 7:57 am #
[...] of 2010, and this morning Bank of America posted losses of $2.4 billion. What’s the solution? Expand the CRA, [...]
Comment by Joe on 10/16 @ 8:30 am #
What could go wrong?
Comment by Pablo on 10/16 @ 8:42 am #
Yes. Production is hard. Begging through shaming is easy.
Comment by cranky-d on 10/16 @ 9:20 am #
I imagine that the original purpose of the CRA was to correct an issue that loans were not being given for equivalent financial situations across “racial” lines. Wouldn’t it have been better to just write or enforce laws that require equal treatment, based on merit, for everyone applying for loans, and have harsh penalties for non-compliance?
Yeah, I know. I’m kidding myself again. I need to find an identity group to join to get my largess off of those assholes who persecute me, but I’m a white male. Well, we’re dying out anyway. I wonder what will happen when there aren’t any of us left any more? Who will be the next in line to blame for the ills of society?
Comment by bigbooner on 10/16 @ 9:25 am #
This sounds like something Homer Simpson would try. Time and time again.
Ow
Ow
Ow
Ow
Ow
Hey, that really hurts!
Comment by geoffb on 10/16 @ 9:55 am #
I’ve heard this all before. Had it beaten into my/our head/s with a 2×4 of the harshest language.
The cycle of power ridden by our politicians.
Create a crisis.
Have a scapegoat at hand.
Blame the goat and have activist groups demand that the Government do something.
Do something that sets up the next usable crisis and the new goat.
Spinning faster and faster as the power is pulled ever tighter to their chests.
Comment by geoffb on 10/16 @ 9:59 am #
Ask better for who (whom? I can never get that one right)and then the real purpose comes into the light. Used to say follow the money. That still has usability but follow the power works better in the political realm.
Comment by SporkLift Driver on 10/16 @ 10:07 am #
Cranky-d, I think the issue had already been dealt with in the manner you prescribed (at least I remember laws against “redlining” being enforced). Minorities were still not being granted loans at the same rate as whites. This only served as an excuse however as the first rule of activism is to remain active.
Comment by Bob Reed on 10/16 @ 11:32 am #
cranky-d,
I suppose it’s motivation was to increase the housing market and the value of real estate by seeing that loans were granted to those who just barely couldn’t meet the standards of the day. And as time went on, and agenda’s became more ambitious, those standards kept being lowered until we got where we are today; where it has transformed into a wealth redistribution tool via the GSE’s instead of a incentive program…
Read Dicentra’s excellent pub post from May, as well as the City Journal piece she links to
http://proteinwisdom.com/pub/?p=2818
It spells out the history and iterations of CRA since the early 1920’s…
Be Cool!
Comment by cranky-d on 10/16 @ 11:46 am #
I would posit that if the loan standards were indeed equally applied, and minorities were not being granted loans at the same rate as whites, then there was a disparity in the number of underqualified minorities applying for loans as opposed to underqualified whites applying for loans. Expecting the same rate of “success” across all “races” is stupid. However, it’s certainly easier to address such a problem by using simple statistics and applying a misguided fix than it is to figure out what’s actually going on.
Comment by AJB on 10/16 @ 12:02 pm #
http://www.fdic.gov/news/news/speeches/archives/2008/chairman/spdec1708.html
This is from a G.W. Bush appointee FYI.
Comment by Kresh on 10/16 @ 12:12 pm #
I see what you did there. Unfortunately, this means nothing here. Care to try again?
Comment by Salt Lick on 10/16 @ 12:26 pm #
ChiaObama! Put it on your shopping list!
Comment by JD on 10/16 @ 12:47 pm #
That never stopped ACORN and Barcky from filing lawsuits and picketing the banks, did it, AJB?
Comment by doubled on 10/16 @ 1:00 pm #
I read somewhere that for the last 100 years (up until the subprime crisis) the safest loan a bank could make was for a home mortgage. What changed? Cetainly, loaning to those who are less qualified will cause an increase in failure that leads to forclosure, that should be obvious. But, what realy threw gas on the fire was the actions of Freddy Mac and Fannie Mae. In the past a bank would make the loan and hold it. Now Freddy and fannie would buy it from the lender, giving the lender a chance to make another subprime loan again, agian and again. So instead of x amount of subprime loans out in the marketplace causing problems, there were x times 1000’s of them.
Also, in the past if an area had a downturn, and property values fell, it only affected that geographic area holding the bad loans, and other areas would be unaffected. Wth the comingling of loans from all over the country into 2 companies,a limited number of problem areas (i’ve read that 4 or 5 counties account for 70% of all foreclosures) affected the whole country, and indeed, affected foreign investment as well.
And , this doesn’t even get into the myriad of different types of loans available today which would have been laughed at in the past : no down payment loans, interest only loans, balloon payments, etc…. in my opinion creating the atmosphere of making sure anyone who wanted a loan should get one.
Comment by LTC John on 10/16 @ 1:07 pm #
I feel the damned fool for putting 1/3rd down on my house, planning my budget to keep it even if my income went down by 20% or so, etc.
I should have picketed the nearest bank and demanded a whopping big loan on behalf of all Frisian-Americans!11!!1! Then followed the IowaHawk loan repayment program…
Comment by Danger on 10/16 @ 1:23 pm #
“Point of fact: Only about one-in-four higher-priced first mortgage loans were made by CRA-covered banks during the hey-day years of subprime mortgage lending (2004-2006).”
AJB,
This declaration is meaningless because it does not include low and moderate-priced first mortgages nor does it define higher-priced mortgages.
In the future, try reading without the liberal tinted glasses before embarassing your self.
Comment by JHo on 10/16 @ 1:28 pm #
I’d highlight AJB’s comment thusly, to be read with the modicum of doubt for government-mandated aberrations of free market behavior — or if you prefer, soft Marxism — it deserves:
Let the record show indeed.
Comment by JHo on 10/16 @ 1:30 pm #
In other words, Shiela Blair loves her some positive intentionalism.
Comment by Danger on 10/16 @ 1:33 pm #
and cherry-pickin JHo
Comment by Bob Reed on 10/16 @ 1:37 pm #
Precisely Danger,
And it doesn’t aggress the amount of paper that Fannie/Freddie hold, and what percentage of the entire residential mortgage market that represents…
http://www.voxeu.org/index.php?q=node/1714
Total mortgage value in the US is around 10 trillion dollars…
Of which the GSE’s currently hold somewhere between 5.5 to 6 trillion dollars
http://digital.library.unt.edu/govdocs/crs/permalink/meta-crs-10771:1
And don’t forget that they are in recievership. Although it wasn’t true until they went down the tubes, now the government is responsible for the approximately 1.5 trillion in investment bonds that they owe.
The numbers are staggering…
Comment by Bob Reed on 10/16 @ 1:40 pm #
Oh, and I forgot,
Sorry for the HTML fail, the quoted Sheila Blair remarks are cherry picked, and in your face AJB; we’re speakin’ troooooooof! to Pow-ah! up in here…
Comment by cranky-d on 10/16 @ 1:47 pm #
It appears that my hammer on AJB expired recently. Same old B.S. as always.
Back into the troll bin, assertion monkey.
Comment by cranky-d on 10/16 @ 1:48 pm #
You know what I think we can agree? Assertion monkeys assert.
Comment by Ming on 10/16 @ 2:13 pm #
This little lecture brought to you by the party that supports KBR’s taxpayer funded right to gang rape.
Comment by B Moe on 10/16 @ 2:15 pm #
The bunnies are on the other thread, ming.
Comment by sdferr on 10/16 @ 2:21 pm #
Ming of the Chinese dynasty Mings or Ming of the Buck Rogers Mings, or just Ming of the assertion monkey Mings?
Comment by guinsPen on 10/16 @ 2:39 pm #
Flash Gordon, it was.
Comment by sdferr on 10/16 @ 2:41 pm #
I stand properly corrected, thanks guinsPen.
Comment by Frontman on 10/16 @ 2:46 pm #
Where’s my vase, bitch?
Comment by JD on 10/16 @ 2:48 pm #
Ming mungs Kennedy.
Comment by Frontman on 10/16 @ 2:49 pm #
Mung as in beans, or… that other thing?
Comment by JHo on 10/16 @ 3:10 pm #
I don’t know about you guys, but I accept Ming’s veiled concession.
Comment by JHo on 10/16 @ 3:18 pm #
But can Ming the Obamalyte wrap its head around this.
Yes, this is very big. Curious to know your thoughts, Bob.
Change, baby.
Comment by JD on 10/16 @ 3:34 pm #
Frontman – Under no circumstances should you or anyone you care about look up the word mung at urbandictionary.com. Do. Not. Do. It. You have been warned.
Comment by happyfeet on 10/16 @ 3:43 pm #
JHo that sort of thing causes anxiety in my head.
Comment by happyfeet on 10/16 @ 3:44 pm #
I believe JD cause sometimes I still have parsnip flashbacks.
Comment by JHo on 10/16 @ 3:47 pm #
It’s not without its entertaining episodes, ‘feets. Apparently Obie supports Paulson and Fed expansionism. More Fed powah, sez Obie, while even the left — what of it isn’t dead between the ears — shouts for Fed reform.
Change, baby. “You betcha!”
Comment by happyfeet on 10/16 @ 3:52 pm #
I have to come back and see that later cause it’s blocked. I was just thinking what would help is if the little president man canceled his massive stimulus borrowing plan that’s been feckless and carsforclunkery anyway and gave up on socializing medicine since our government is a crap hole that can’t run a dog show and if he resigned and said he was just kidding about that whole being the little president man farce. Then we could maybe find some adults somewheres that were willing to help.
Comment by Swen Swenson on 10/16 @ 4:34 pm #
I kinda liked Flesh Gordon. His Assholeyness, the evil Emperor Wang was a real baddy. I guess they don’t show that sort of stuff on late night HBO anymore though, too close to reality.
Comment by Ming on 10/16 @ 4:40 pm #
JHo the Obamaniac – that’s not, actually, Change, baby – that’s called the coasting trainwreck that your guy did a lot to create. Glad you’re now all over this issue, but, you know, given the choice, you’d vote for it/him again.
Comment by Ming on 10/16 @ 4:44 pm #
Oh, and I just love the graph, baby. Look at where the slope changes. If only there were some way to know who the president was in 1982.
Comment by JD on 10/16 @ 4:59 pm #
Or who was in charge of the purse-strings in ‘82.
What a douchenozzle.
Comment by B Moe on 10/16 @ 5:00 pm #
You’re really not very bright, are you?
Comment by JHo on 10/16 @ 5:48 pm #
I think Ming is trying to take the most immature view of American central power and decision-making it possible can, suggesting that the POTUS is king and budgets are a kingly function. And that strict monetary and fiscal policy is a proud American tradition stretching back to FDR simply because FDR was a Democrat.
I think Wilson (also a D., and of the infamous Federal Reserve Act) factored into our intractable mess too, Ming.
“We have come to be one of the worst ruled; one of the most completely controlled and dominated governments in the civilized world … no longer a government of free opinion, no longer a government by conviction and the free vote of the majority, but a government by the opinion and duress of a small group of dominant men.”
Speaking of dominant men, maybe this graphical representation can help widen Ming’s horizons.
As to how money works, Ming is going to be so disappointed to learn that just like seventy five years of DC politics,
Bush exerted no kingly control over either Congress or Wall Street.
Quoting Keynes — yes, Keynes — from decades back on the state of fiat money:
“By a continuing process of inflation, governments can confiscate secretly and unobserved, an important part of the wealth of their citizens … As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless…”
Sound familiar? So, wrong blog, Ming.
Comment by geoffb on 10/16 @ 7:22 pm #
Oh, JHo. I’d like to thank you, actually no fooling, you made me laugh, for the remembrance of my school days in the 50s/60s when no one, not even teachers had ever seen or pronounced my name before. Your spelling was one pronunciation used. It wasn’t till 10th grade English that someone had at least heard of Chaucer.
Comment by SBP on 10/17 @ 7:30 am #
This little lecture brought to you by the party that supports KBR’s taxpayer funded right to gang rape.
Buh-bye.
Comment by SDN on 10/17 @ 12:34 pm #
Ming, when you can point out the filibuster-proof majority (heck, conservative majority of any sort) years, get back to me.
Comment by Rusty on 10/18 @ 6:10 am #
#47
I’m glad you’re comfortable with tax avoidance.
The better question would be -Who was the president in 1931.
” All bills to raise revenue must originate in the House of Representatives.” It’s lie a law or something.
Comment by SBP on 10/18 @ 6:12 am #
Ah. Had forgotten “Ming”’s previous appearance. Another name-switching troll, I see.
Comment by Rusty on 10/18 @ 9:13 am #
like
Comment by swink on 10/18 @ 9:29 pm #
This makes me crazy. I want to go to Washington and strangle a few “Congresspeople.” What shits. What freeloaders. When are we going to insist on term limits for these wastrels? We need citizen representatives, not these weasels who are sucking the govt. tit harder than any welfare recipient?
Pingback by Steynian 391 « Free Canuckistan! on 10/20 @ 12:53 pm #
[...] ACORN’S Blackmailing of Banks; Obama: We’ll Replace ACORN With Our Own Bureaucracy …. [...]
Comment by samson on 10/22 @ 1:18 pm #
That’s just not true.
There is not one NINJA loan out there that helped a bank or thrift on the CRA exam.
One, CRA doesn’t tell bankers what loans to make. That’s in the original language of the bill. Regulators told the banks to have “CRA your way,” but that is because the law leaves up to banks to allocate credit as they prefer.
About underwriting – the truth is that CRA loans have outperformed their peers. Those loans were only made by banks & thrifts, remember?
It was the subprime lenders that weren’t covered by CRA.
CRA only only looked at the share of LMI loans on a small segment of the mortgage market – one in sixteen mortgage loans according to the University of Chicago.
Here’s some basic explanation for you.
http://bit.ly/hDweT